Post-Covid telework and productivity: Large-scale evidence from French firms

Hybrid telework has become one of the most enduring legacies of the Covid-19 pandemic. While many firms have settled on a model of around two days of remote work per week, its impact on productivity has remained a subject of ongoing debate. A recent IZA Discussion Paper provides new evidence from France, suggesting that maintaining hybrid work has delivered measurable productivity gains.

Measuring the impact of hybrid work

In Post-Covid Telework and Productivity: A Large-Scale Analysis (IZA DP No. 18655) authors Philippe Askenazy, Ugo Di Nallo, and Ismaël Ramajo draw on employer survey data matched with a wide range of administrative data covering French firms outside the agriculture, finance, and real estate sectors. The study examines whether firms that maintained telework after the last significant Covid wave experienced stronger productivity growth between 2019 and 2022/23.

The results show a positive relationship between telework adoption and productivity growth over the period. Firms that continued to embrace hybrid work outperformed those that returned entirely to on-site operations.

Identifying the causal effect of telework

To determine whether telework itself caused these gains, the researchers exploit firms' pre-pandemic office organization as a natural experiment. Companies that had rented office space separate from their production or retail activities were better prepared to implement telework during the pandemic. They also had stronger incentives to maintain hybrid work because it could help reduce office space.

The findings confirm that firms with such premises employed significantly more teleworkers after the pandemic, providing evidence that telework had a direct causal effect on productivity. Specifically, a 10 percentage-point increase in the share of teleworkers is associated with approximately 2.7 percentage points higher productivity growth.

Productivity gains beyond office savings

The study demonstrates that while firms adopting hybrid work made some adjustments to office space and equipment, these changes were relatively modest. Instead, the productivity gains appear to stem primarily from broader organizational and managerial transformations linked to hybrid work practices.

Implications for the future of work

These findings add key evidence to the debate on the long-term effects of remote work, suggesting that the benefits of hybrid telework extend beyond reduced commuting or office costs. Rather, they arise from fundamental changes in how firms organize work and manage their workforce, pointing to hybrid work as a lasting driver of productivity in the post-pandemic economy.