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Abstract:
Flexible work hour arrangements benefit or hurt productivity? To answer this question, we conducted an experiment on a major online freelancing labor market platform. We began with three data entry job advertisements that were identical in all respects except for the level of flexibility in choosing work hours. For each job, we invited a randomly selected group of freelancers to apply and hired all those who accepted the invitation and the contract. Next, among the freelancers hired for jobs with no or limited flexibility, a randomly chosen subset was later granted full flexibility. We find that, compared to freelancers hired for the flexible job, those hired with no flexibility in choosing work hours made 35% fewer correct entries. Around 40% of this effect is explained by selection - more productive workers are more likely to choose flexible jobs. The remaining 60\% is a direct effect of (in)flexibility in choosing work hours.
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