Nicol Barbieri (University of Naples Federico II)
This paper studies the impact of Working from Home (WFH) on voluntary quits in the context of the Italian labor market. It specifically investigates how and to what extent the adoption of remote work during the COVID-19 pandemic shaped workers’ quitting behavior and how this translated into changes in employers’ market power. Using very rich administrative employer-employee data, I implement a Difference-in-Differences (DiD) event-study analysis that exploits pre-pandemic variations in remote work exposure across occupations to identify the causal effect of WFH on the likelihood of voluntarily quitting. Then, I investigate whether this shift translates into changes in the voluntary quit elasticity, particularly among occupations with greater exposure to remote work. My results show that workers in highly remote-exposed occupations experienced a significant reduction in voluntary quits compared to those in occupations with lower remote exposure. This drop is related to lower wages and workers’ lower sensitivity to wage changes, potentially indicating that WFH acts as a substitute for monetary compensation. Overall, these results suggest that employers in teleworkable occupations can retain workers while offering relatively lower wages, possibly reinforcing monopsonistic tendencies.