not supply any hours of work. If the utility function is tangent to any point on the segment CD, the decision will be to work on-site and teleworking for the segment BC.

Basically, the difference between on-site work and teleworking is the presence of fixed costs associated with working on-site and the possibility of getting some household work done while teleworking. The fixed costs are shown in the slope of the line DE. The higher the fixed cost, the further to the left will be the segment corresponding to working on-site (DC). The joint production is shown in the slope of the line FB; the higher the joint production, the further to the right will be the segment CB associated with homebased work.

Given our model, we expect that women facing higher fixed costs are more likely to work from home or stay out of the labor force. Then the question is, what characteristics make a woman more likely to telework instead of being out of the labor force? We aim to shed some light on this question in the empirical exercise discriminating between self-employed and salaried workers. Workers may differ in their characteristics such as motivation, ability or entrepreneurial aptitude and therefore their decision to work from home or on-site.

The preceding analysis focuses on the supply of labor, ignoring the fact that there may be no demand for at-home work for some occupations. The evidence shows that there are different demands for telework across sectors<sup>16</sup> and occupations.<sup>17</sup> There is a group of workers who will be unable to work remotely even if they wanted it. Workers in sectors like services, retail trade, and wholesale, may not have the option to work on-site. Moreover, some firm characteristics may explain the need for on-site and/or home-based workers. Given the requirements of face-to-face interaction, digital access, and the technology intensity of the production process,<sup>18</sup> firms can adopt telework if a minimum level of technological and organization provisions are met (Tokarchuk, Gabriele, & Neglia, 2021).

In general, firms with employees that are more skilled and with greater experience are more likely to use teleworking. According to Brussevich, Dabla-Norris, & Khalid (2020) Mexico has the lowest teleworkability scores making Mexican workers more economically vulnerable. For instance, a high share of workers with low levels of education,<sup>19</sup> part-time work, informal or casual working arrangements, and limited access to computers and the internet. In fact, in 2019 less than half the households in Mexico had a computer, and just about 56 percent had internet access.<sup>20</sup>

# 4. Data and Empirical Strategy

- i. Data

We use the National Survey on Availability and Use of Information Technologies in Households (ENDUTIH) which is representative nationwide. This survey is conducted by Mexico’s National Institute of Statistics and Geography (INEGI). It has information on communication technologies such as cellphones, computers, radio, and television and their use by individuals and households. For this paper, we largely use the 2020

> 16 Less teleworkable sectors are accommodation and food service, construction, transportation, and retail among others. Those sectors require face-to-face interactions and during the COVID-19 pandemic faced a higher risk of layoffs and furloughs.

> 17 Fewer teleworkable occupations are elementary, plant/machinery, crafts/trade, and service/shop/market among others.

> 18 (Brussevich, Dabla-Norris, & Khalid, 2020)

> 19 Only 23 percent of Mexican aged 23-25 have a college degree according to OECD data.

> 20 The percent of households which access to computers in 2019 was 44.3 and 44.2 in 2020. Access to internet 56.4 and 60 percent. (ENDUTIH 2020)

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