Yahoo Work-at-Home Edict Squanders Benefits: Cutting Research

Yahoo! Work-at-Home Edict Squanders Benefits
Home workers reported they were more satisfied with their employment, leading fewer to quit. Still, their improved performance didn’t lead to more promotions. Source: EyesWideOpen/Getty Images

March 15 (Bloomberg) -- Marissa Mayer’s decision to order Yahoo! Inc. staff to work in the company’s offices runs counter to new research published by the National Bureau of Economic Research.

About a month after the biggest U.S. Web portal told employees to end work-from-home arrangements, a working paper released March 11 by the NBER concludes there are benefits for companies that allow staff to telecommute.

While about 10 percent of U.S. employees are allowed to work without leaving their front door, economists including Stanford University’s Nicholas Bloom said in their study that there are concerns the practice leads to “shirking from home.”

They studied International Ltd., a 16,000-employee Chinese travel agency listed on the Nasdaq Composite Index, which sought volunteers and then assigned some to work at home for nine months.

The results showed home-working led to a 13 percent increase in performance, mainly reflecting reductions in sick days and breaks. The rest was attributed to making more calls per minute thanks in part to the quieter working environment.

Home workers also reported they were more satisfied with their employment, leading fewer to quit. Still, their improved performance didn’t lead to more promotions.

The company reacted by allowing the whole firm to choose whether to work from home, and the performance gains almost doubled. The economists acknowledged call-center work is particularly suitable for telecommuting and the activity of such workers can be more easily monitored.

Although the study didn’t mention Yahoo or Chief Executive Officer Mayer, the Sunnyvale, California-based company is at the heart of the debate over flexible working arrangements after Jacqueline Reses, the executive vice president of people and development, last month told employees to make their way to offices, starting in June. Being side-by-side fosters collaboration and improves work “speed and quality,” she wrote in a memo.

“The practice of working from home is worth further exploration,” said the report’s writers. “After all, much of the research for this paper and its writing were done by the authors working from home.”

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Yahoo! may still enjoy an advantage from having Mayer as CEO.

A study based on companies listed in France’s CAC 40 Index found those with women in a third of managerial positions have enjoyed significantly better stock performance than the other companies over the last six years.

The Femina Index, created by professor Michel Ferray at Geneva University’s Skema Business School, shows the ten companies where women made up a third of management lost an average 5.28 percent between 2007 and 2012. The French benchmark stock index fell 34.7 percent over the same timeframe.

The companies which included a higher proportion of women in management included BNP Paribas SA, Danone SA and L’Oreal SA.

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Federal Reserve policy makers have a bigger effect on financial markets when they speak as a group rather than individually.

The release of statements and minutes by the policy-setting Federal Open Market Committee each had roughly four times the average effect of speeches, said Macroeconomic Advisers LLC in a March 8 report.

FOMC statements had the largest impact, moving the 10-year note yield by an average of 3.5 basis points last year. The minutes of meetings and Chairman Ben S. Bernanke’s press briefings moved the yield by about 3 basis points on average.

“The substantial impact of the minutes and press briefings may reflect that these proved to be excellent guides to the evolving Committee consensus in 2012, often providing the first signals of an emerging consensus,” authors Laurence H. Meyer and Antulio N. Bomfim said.

The study also found Bernanke moved the 10-year yield by the most of all Fed officials, shifting it 18 basis points on a cumulative basis. The runners up were Dennis Lockhart of Atlanta and Richard Fisher of Dallas.

Bernanke had the biggest impact per speech and Fisher delivered the most speeches related to monetary policy, the study found.

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A resurgence in U.S. manufacturing could spell bad news for emerging markets.

That’s the warning of a March 6 study by Morgan Stanley economists Manoj Pradhan, Patryk Drozdzik and Sung Woen Kang.

That’s because if the U.S. returns to sustainable growth, it will probably do so as a competitor for emerging markets, after five decades in which a strong U.S. economy meant robust demand for goods from developing nations.

The re-industrialization of the U.S., aided by the shale-gas revolution and corporate cash reserves, means U.S. factories will jostle for a bigger piece of the production pie just as demand falls from developed nations for consumer goods, the economists said in their report. The U.S. may also increase its manufacturing base by moving down rather than up the “value-added ladder,” producing lower-cost goods, according to the report.

In the emerging world, China, Brazil and Russia are among potential losers from the increased U.S. threat, according to Morgan Stanley. Mexico is a winner because of its U.S. ties.

Countries could help limit the damage by finding ways to play a role in the U.S. supply chain and taking steps to spur domestic demand, according to the authors.

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Moore’s Law, the principle that the number of transistors on an integrated circuit doubles every two years, is not the most accurate prediction for the pace of technological progress, according to online journal PLOS ONE.

A better gauge is Wright’s Law, first outlined in 1936, which maintains that progress increases with experience, or that each improvement in an industry’s cumulative production yields a fixed percentage gain in efficiency.

The conclusion comes from a study into forecasting technological progress that looked at 62 different industry sectors from aluminum to beer.

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A study published this month by the European Central Bank shows changes in tax revenue have no significant impact on economic growth while government spending appears to undermine it.

Economists Antonio Afonso and Joao Tovar Jalles studied a group of 155 economies from 1970 to 2008. They found levies on incomes are not growth-enhancing, neither is government consumption. By contrast, state spending on education and health increases economic growth.

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The U.S.’s move toward energy independence is set to increase the country’s economic advantage over Europe, according to Bank of America Merrill Lynch.

The development may boost U.S. gross domestic product by as much as 1.5 percentage points relative to European output, said New York-based David Woo, head of global rates and currencies research, in a March 10 report.

It would also help reduce the U.S. current account deficit, which currently includes a petroleum trade shortfall of 1.7 percent of GDP, compared with Europe’s 4 percent.

Energy independence would be bullish for the U.S. dollar and help break the cycle between the currency and the price of oil that has been a source of economic volatility, according to the report. It may even ease inflation’s sensitivity to growth.

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It all adds up salary-wise for children who are good at math.

Those in the top 15 percent of math scores at age 10 can expect to earn 7.3 percent more when they are 30 than otherwise identical children who achieve middle-ranked results, according to a study of British youngsters by the London-based Institute for Fiscal Studies published March 8.

That’s the equivalent of earning an extra 2,100 pounds ($3,100) a year.

While reading skills are also important, that has less of an influence over pay, according to the report. A child scoring in the top 15 percent of reading at 10 will probably earn 1.9 percent, or 550 pounds, more annually two decades later than a peer who doesn’t do as well.

To contact the reporter on this story: Simon Kennedy in London at

To contact the editor responsible for this story: Craig Stirling at