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The purpose of this paper is to investigate the determinants of the probability of being a teleworker and the extent of earnings differentials between teleworkers and traditional employees.

The analysis is grounded on a theoretical framework depicting endogenous telework assignment and wage variations based on individual bargaining. The empirical strategy allows for non-random telework assignment, generating from individual- and job-specific observed as well as unobserved factors.

Results are based on the Italian labor force survey and uncover a key role of gender, higher education and family composition as determinants of the probability of teleworking. Furthermore, teleworkers enjoy a wage premium ranging between 2.7 and 8 percent.

Accounting for observed individual and job-specific effects, by both standard linear regression and propensity score matching, largely reduces the extent of wage premium emerging from unconditional descriptives; the results of an endogenous switching regression model however suggest that failing to properly care for unobserved factors leads to the underestimation of returns to telework.

The purpose of this paper is to describe the hypothesis of effort‐based career opportunities as a situation in which profit maximising firms create incentives for employees to work longer hours than the bargained ones, by making career prospects depend on working hours. The paper aims to test some implications of this hypothesis using UK data.

The empirical analysis uses the British Household Panel Survey (BHPS) and panel data estimators to investigate the existence of a robust correlation between working hours and workers' expected probability of promotion in the current job.

The analysis shows the existence of a robust positive correlation between working time and workers' expected likelihood of promotion in the BHPS data even when controlling for several individual characteristics and for workers' unobserved heterogeneity.

Although the paper uses panel data, the BHPS does not allow for the identification of the firms in which individuals work, and therefore to control for firm fixed effects. Employer‐employee datasets would have allowed a better assessment of the hypothesis.

The paper provides a theoretical explanation for the empirically observed positive association between working time and expected promotion probability and, unlike previous papers that used pooled OLS estimates, it exploits the panel structure of BHPS data to control for individual unobserved heterogeneity.