Smart Working: Work Flexibility Without Constraints

Abstract

Does removing constraints on the time and place of work benefit the utility of workers and firms? We design a randomized experiment of a sample of workers in a large Italian company; workers are randomly divided into a treated group that engages in flexible place and time of work (which we call “smart working”) one day per week for nine months and a control group that continues to work traditionally. By comparing the treated and control groups, we find causal evidence that the flexibility of smart working increases the productivity of workers. We estimate a decrease of one day of leave on average per month, and we exclude a significant decline in objective productivity in any month. We also find sizeable improvements in well-being and work–life balance, and we observe that men also increase the time dedicated to household and care activities. This paper was accepted by Yan Chen, behavioral economics and decision analysis. Funding: This work was supported by the Italian Presidency of the Council of Ministries and European Commission (Italy’s Department for Equal Opportunities and t). Supplemental Material: The online appendix and data are available at https://doi.org/10.1287/mnsc.2023.4767 .