CBO Comparison of Federal and Private Sector Telework Rates

The following is part of the Congressional Budget Office’s latest report on telework rate comparisons among federal and private sector workers. While this was only a small part of the overall comparison of salaries and other factors, the telework section gained attention, including during recent House hearings, due to findings that, overall, federal employees teleworked at lower rates – contrary to claims many in Congress.

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Most employees are willing to accept a lower-paid job if it gives them the option to work from home. For this reason, providing more telework options may reduce the compensation the federal government has to offer compared to private sector compensation to attract and retain highly skilled workers. (Providing fewer telework options would have the opposite effect.)

CBO used data from the American Community Survey (an annual survey conducted by the Census Bureau) to compare telework rates among federal employees and their private sector counterparts. While CPS has little data on telework, the American Community Survey asked workers how they “usually” get to work and provided “work from home” as one of the options respondents could choose. Thus, the telework rates estimated by CBO likely represent the share of workers who work from home most of the time, including those who always work from home.

In both sectors, telework rates nationwide increased during the coronavirus pandemic (in 2020 and 2021) and then partially declined (see Figure 4-1). CBO estimates that in 2022, 22 percent of federal employees typically worked remotely, as did 25 percent of their private sector counterparts. The private sector telework rate would be lower if CBO did not adjust for differences in workers’ education, location, and occupation. Telework was more common among better-educated workers in both sectors (with the exception of workers with a professional degree or doctorate in the private sector, who teleworked less often than private sector workers with a bachelor’s or master’s degree). Additionally, telework was more common in urban areas. For example, in 2022, the telework rate for workers in the Washington metropolitan area was 38% for federal workers and 40% for their private sector counterparts, according to CBO estimates.

Figure 4-1.

Percentage of employees who usually work from home, by sector

Federal employees and their private sector counterparts work remotely at roughly similar wages. In both sectors, telework rates increased during the coronavirus pandemic (in 2020 and 2021) and then partially decreased.

Notes

Data sources: Congressional Budget Office; Census Bureau, American Community Survey, from IPUMS-USA. See www.cbo.gov/publication/59970#data.

A. Telework rate for private sector employees who resemble Federal employees in occupation, years of work experience, and certain other observable characteristics that may influence telework.

The possibility of teleworking depends largely on the profession. In 2022, federal employees were more likely than private sector employees to work in occupations where telework was common. For example, in computer science and mathematics occupations, where a larger share of federal workers than private sector workers worked in 2022, telework was most common. However, the telework rate for people in these occupations varied by sector – 37 percent for federal workers compared to 56 percent for their private sector counterparts in 2022. One reason for the significantly higher telework rate for private sector workers may be that Federal employees are more likely to have to go to the office to access sensitive data. For example, federal employees working as operations research analysts (a common job in the Department of Defense that often requires a security clearance) are less likely to use telework than their private sector counterparts.

Federal employment was also common in some occupations where telework was rare in 2022. For example, among federal workers in the areas of nursing, law enforcement and transportation security inspection, the telework rate in 2022 was just under 10 percent — likely because the jobs require frequent in-person interactions. In contrast, other occupations where telework is rare (such as construction, manufacturing and transportation) employ few federal workers.

Overall, less telework among federal employees compared to their private sector counterparts may have slightly reduced the attractiveness of working for the federal government in 2022. Limited evidence suggests that U.S. workers would be willing to forgo, on average, about 8 percent of their pay to work from home half the time time. Other studies have shown that the ability to telework increased employee retention at a large technology company. However, CBO estimates that in 2022, the telework rate was only about 2 percentage points lower for federal workers than for their private sector counterparts. This finding suggests that because only a small fraction of federal workers would be able to telework more often if they instead worked in a similar job in the private sector, the average effect of less telework on the attractiveness of federal employment was small.

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