March, 2000, Vol. 123, No. 3
or work invasion?
Workplace practices and the New Economy
Précis from past issues
Telecommuting or work invasion?
Telecommuting—using the Internet and other communications technologies to enable significant regular work at sites away from a traditional workplace—remains the wave of the future, according to some observers. An article by Federal Computer Week reporters Colleen O’Hara and Natasha Haubold finds that telecommuting among Federal workers leveled off at about 25,000 workers in 1999, well short of an informal goal of 60,000 telecommuters. The authors report that such factors as management attitude, data security, and technical support are some of the challenges restraining the growth of these work arrangements in the Federal sector.
A Stanford University study, Internet and Society: A Preliminary Report, of the impact of the Internet also finds little evidence that telecommuting is starting to make strong inroads. Although the principal author, Professor Norman H. Nie, was surprised at the degree to which respondents reported using the Internet at home to do work for an employer, the report found that only a small number (4 percent) had reduced hours at a regular worksite while increasing hours worked at home. In fact, according to the study, "more than a quarter of full- or part-time workers who use the Internet over 5 hours a week said that the Internet has increased the amount of time working at home without decreasing the amount of time working in the office."
Some of the language used in the Stanford report was also indicative of other attitudinal challenges telecommuters might face. The chart of the work data is labeled "Chart 8: Work invades home and increases at the office," and the text of an accompanying press release echoes the theme. After admitting the possibility that the 4 percent of Internet users who have cut back on hours at the office may be the start of telecommuting, Nie is quoted as saying: "On the other hand, we all know from our cell phones and laptops that work appears to be intruding into every other aspect of our lives, and that’s one of the clearest trends in these data."
A witticism attributed to Robert Solow holds that, "We can see the computer age everywhere but in the productivity statistics." There is widespread agreement that this paradox is a measurement problem—official price and output data are simply missing the computer revolution.
Every now and then, however, a shadow of doubt appears. Are computers truly an unalloyed boon for productivity? One recent example takes the form of a study, New Evidence on Classroom Computers and Pupil Learning, a NBER working paper by Joshua Angrist and Victor Lavy.
Their paper analyzes the impact of Israel’s "Tomorrow-98" program, an ambitious effort to upgrade the computer resources available to elementary and middle schools in that nation. If one accepts average pupil test scores as a measure of output, then the authors’ findings that there is "a consistently negative relationship between the program-induced use of computers and fourth-grade math scores" and "[f]or other grades and subjects, the estimates are not significant, though also mostly negative," are troublesome. Perhaps, the computer revolution is having a beneficial effect everywhere but in the productivity statistics and the productivity of the classroom.
This study, of course, is not, and does not purport to be, a complete productivity analysis. For one thing, there is little information on inputs to be matched with the data on educational outcomes. But Angrist and Lavy conclude by questioning whether those inputs appear to be justified by performance.
Workplace practices and the New Economy
Much of the discussion of a "New Economy" focuses on information technology—hardware, software, capital expenditures, and so forth. Sandra E. Black and Lisa M. Lynch’s NBER working paper, What’s Driving the New Economy: The Benefits of Workplace Innovation, picks up the parallel argument which some analysts have made that some part of the renaissance in productivity is attributable to "increased managerial focus on quality management, continuous innovation, incentive-based compensation, and employee involvement programs."
Using data from the 1993 and 1996 waves of the Educational Quality of the Workforce National Employers Survey, Black and Lynch found considerable change in such workplace practice over the 3-year period. Nearly a third of firms in the survey changed in their deployment of benchmarking, number of management levels, and share of workers in self-managed teams or other regular councils. Black and Lynch found that the diffusion of technology, as measured by change in the proportion of nonmanagers using computers, is positively related to productivity. The authors also concluded that workplace practices matter: "[F]irms that re-engineer their workplace to incorporate more high performance practices experience higher productivity growth. Profitsharing and/or stock options are also associated with higher productivity growth, although it is not always statistically significant in all specifications. … Finally, employee voice (as proxied by the percentage of workers meeting regularly to discuss workplace issues) does appear to contribute to labor productivity."
We are interested in your feedback on this column. Please let us know what you have found most interesting and what essential reading we may have missed. Write to: Executive Editor, Monthly Labor Review, Bureau of Labor Statistics, Washington, DC. 20212, or e-mail MLR@bls.gov
Within Monthly Labor Review Online:
Welcome | Current Issue | Index | Subscribe | Archives
Exit Monthly Labor Review Online:
BLS Home | Publications & Research Papers