by Megan E. Hansen, Research Director; Rebekah Yeagley
Posted July 10, 2019 In Scholar Commentary

This article was originally posted on the Medium publication The Benchmark

This week Utah announced that thousands of state employees may soon become eligible for a work-from-home option. That news comes after a pilot project showed that productivity went up 20 percent among workers allowed to telecommute. But these workers aren’t just more productive. They’re also reducing carbon dioxide emissions by foregoing a long commute and saving taxpayer money by reducing the need for large office buildings.

And Utah is not alone in this change. Over the last few decades, the number of Americans working from home has steadily increased. Last fall, Quartz reported that over 5 percent of Americans worked from home full-time in 2017. While that may seem like a small segment of the overall workforce, Gallup found that in 2016 a much larger share (43%) worked remotely at least part of the time.

It’s worth examining in detail how one group in particular benefits from these changes — working moms. Moms today have better opportunities to build their careers without having to sacrifice other priorities, like spending time with their families. As flexible work arrangements have become more common, more mothers are choosing to participate in the labor market. According to the Pew Research Center in 1975 less than half of all mothers in the US participated in the labor force either through full-time or part-time work. Today, that number has risen to 70 percent.

What’s behind this massive increase in labor force participation rates among moms? Part of it may be changing cultural beliefs about whether moms should work outside the home. But technology is also playing a big role in this change. Advances in technology mean that remote work and flexible work arrangements are more accessible than ever. As a result, moms no longer have to choose between staying at home with their families and building a fulfilling professional career.

And for those who worry about the potential impacts on children from an increase in working moms, these worries are likely overblown. Research by Harvard School of Business professor Kathleen McGinn and her co-authors suggests that children of working moms generally turn out to be happy and productive adults. In fact, children may even benefit.

McGinn found that women whose moms worked when they were children are more likely to work themselves, more likely to hold supervisory roles, and even more likely to earn higher wages. The researchers also found that men who were raised by working moms tend to have more egalitarian gender views and spend more time each week caring for family members.

Regardless, changes in technology and the ability to work from home may mean that women no longer have to choose between building their careers and staying at home with their children. Many women want a flexible work arrangement that is conducive to their family lifestyle. Work-life balance is important for any worker, but women especially prioritize it when job-hunting.

Workers are increasingly demanding flexibility in where and when they work along with the opportunity to work from home as part of a competitive benefits package. Survey results show that for workers in the growing tech field, having remote work as an option is now just as important as health insurance in making a company or a position attractive. As the percentage of the workforce that works remotely continues to grow, more and more workers can take advantage of this added flexibility and autonomy.

And contrary to what you might think, employers benefit as well from having more of their employees work from home. Gallup has found that workers who spend at least some of their time working remotely tend to be more productive and engaged than those who work solely in the office. Researchers at Stanford likewise found that work-from-home employees had a 50 percent lower attrition rate, took fewer sick days and less time off, and were much more productive than workers who had to come into the office every day. Not to mention the rent money that companies can save when they might not need as much space for their employees to sit. Co-working spaces like WeWork allow small companies and freelancers alike to rent out desk space or conference rooms on an as-needed basis instead of paying for space that will sit empty most of the time.

All of these changes benefit working moms by giving them greater flexibility and autonomy over how and where they spend their time.

Home-based businesses thrive on innovative technology
Improvements in technology are resulting in growth not just in traditional workers spending more of their time working remotely but are also allowing home-based businesses to flourish. Many women are taking advantage of the opportunity to not just work remotely, but to start their very own companies from home. In fact, 72% of home-based startups are operated by women, and women-led startups are more likely to continue to operate from the home after several years of operation.

A growing number of online platforms have emerged that connect women with a global client base without them ever having to leave home.

Platforms like Etsy connect artists and talented crafters to customers across the world looking for unique, handmade goods. These sites give female entrepreneurs, in particular, the opportunity to sell their products to interested customers, wherever they may be, without having to incur the costs of setting up a physical storefront. In fact, in 2015, 86 percent of businesses on Etsy were women-owned.

Entrepreneurs also benefit from the ability to easily set up a free, personalized website using services like WordPress, Google, or Wix. With these new technologies, business owners no longer need to have any web design background to set up a website. They can do it themselves in a matter of minutes using free tools and aids like how-to videos or online guides.

Services like Thumbtack, Yelp, and Google also help bring clients and entrepreneurs together in a low-cost and efficient way. They give customers information on companies before the customer even arrives at the store. A Google or Yelp rating is a powerful incentive for small businesses to provide the best possible service, and consumers can look to each other for recommendations.

Even the process of paying for things has been transformed by innovative new technologies that make it easier than ever to process payments remotely and securely. Venmo, Paypal, and Square make processing payments from clients convenient, secure, and cheap.

Home-based businesses in particular benefit from these technologies that enable them to efficiently interact with clients across the world without having to create a physical storefront. And because women make up a large percentage of home-based businesses, they may benefit most from innovative new technology.

Public policies can restrict home-based businesses, limiting job opportunity
As technology continues to make remote work easier, starting a home-based business may seem like the perfect way for many women to continue their careers while spending time with their families. But even small home-based businesses that are operated entirely online can face strict regulatory hurdles. Both zoning laws and occupational licensing can either outright ban a home-based business or create cost-prohibitive barriers that prevent new ventures from ever getting off the ground.

Many states require workers in specific fields to obtain a license to work. Researchers at the Institute for Justice have compared state licenses to a “permission slip” from the government that allows you to work in your chosen field. Licensing rules are meant to ensure a minimum level of quality and safety for consumers. But research by the Center for Growth and Opportunity found that occupational licensing requirements do not result in clear increases in safety or quality. They do, however, reduce employment in licensed fields and increase prices for consumers.

Meeting state-level licensing requirements can be expensive and time-intensive, making it harder for people to get started in a new field. And many occupations that could easily be run from the home, ranging from cosmetology to interior design to flower arranging, are subject to licensing rules. While licensing rules may make sense for high-risk occupations that could legitimately result in harm to consumers, it’s much harder to justify a need for government to protect individuals from a poorly arranged bouquet of flowers or a bad haircut. Despite that, it is more difficult to become a barber or beautician than to become a paramedic in some states.

Even if entrepreneurs are able to obtain a license to work, many find that their ventures are illegal to run from home due to local zoning rules. Zoning laws are meant to reduce the potential impact of a business on surrounding residential areas. Even though many home-based businesses are run entirely online and have no impact on the surrounding neighborhood, they may be severely restricted by zoning rules.

Depending on where you live, zoning can limit or restrict client visits, the number of employees a home-based business can employ, the fraction of your home that can be devoted to the business, and other aspects of running a business from home. But the primary concerns zoning is meant to address — like parking, congestion, and noise — could be better resolved by means other than an outright ban.

For example, to operate a home-based business in Salt Lake City, Utah you’d have to submit an application and comply with a list of requirements that include the following:

  • “Direct retail sales are prohibited”
  • “The home occupation conducted at the residence shall not involve more than one employee from outside the home”
  • “Home occupations involving visitations from pedestrian or vehicular traffic shall only be conducted between the hours of 8:00 am and 10:00 pm”
  • “Any home occupation requiring client(s) visitation shall not occur at a frequency of greater than two clients per hour, and no more than one client may be served at one time and not more than one place of vehicular parking shall be occupied by a client at any time.”

Local zoning ordinances like these are typical of many cities and can significantly increase the amount of funding needed to start a business by making it impossible to run your business from home. As a result, mothers who are looking to stay at home with their children but still want to earn money may not have the option to work from home because of public policies that stifle growth and entrepreneurship.

More flexible public policies will create a brighter future for workers
Remote work and home-based businesses are important factors in the future of work that are opening doors for working mothers. As technology continues to improve, it will become even more feasible to work remotely or to run your own business from the comfort of your home. But in order for this new world to become a reality, public policies must allow for flexibility, innovation, and entrepreneurship. If they do, more and more workers will be able to take advantage of new opportunities, and working moms, in particular, will reap the benefits.

CGO scholars and fellows frequently comment on a variety of topics for the popular press. The views expressed therein are those of the authors and do not necessarily reflect the views of the Center for Growth and Opportunity or the views of Utah State University.