ESRI Discussion Paper Series No.386 Effects of telework on employee's working styles and well-being：Evidence from Japan

 This study explores the impacts of telework on employee's working style and well-being in Japan, leveraging panel data on Japanese employees to mitigate the endogeneity bias. By employing changes in companies' telework policies as instrumental variables, we rigorously estimate the causal effects of telework on various outcomes, including hourly wages, work hours, happiness, and health conditions. Our findings acknowledge the presence of endogenous biases, such as upward bias, and delineate certain effects. Specifically, we observe a decrease in work hours and improvements in well-being and job satisfaction, whereas our analysis represents negative impacts on psychosomatic symptoms affecting mental health and stress impacting work-life balance, albeit statistically insignificant. Furthermore, our subsample analysis reveals significant heterogeneity in the effects of telework across different socio-demographic groups. Notably, permanent employees and those aged 20-39 experience reductions in working hours and enhanced happiness, whereas non-permanent employees, those taking care of their children, and individuals aged 40-59 report adverse mental health outcomes. This study thus highlights the heterogeneous impacts of telework on different groups.