📄 Abstract
Geographic wage differentials in tradable services rest on a spatial wedge: the same task is paid differently according to where the worker sits. Remote work policy is the firm-level instrument that determines whether that wedge can be exploited and whether, in exploiting it, firms compete it away. This article argues that arbitrage and convergence are the same process observed at different horizons, and that work-location policy governs its rate through three channels: the breadth of adoption, which sets how much demand reaches the low-wage location; the pay-setting rule, which determines whether the wedge survives inside the firm; and the coordination structure, which determines which tasks are relocatable at all. A systematic review of 71 studies and data sources, of which 29 supplied extractable quantitative parameters, establishes four findings. First, adoption has stabilised well short of borderlessness: work from home accounts for about a quarter of paid days in the United States and averages 1.5 days a week across twenty-seven countries, with India the highest at 2.6. Second, the wedge is large and largely unexplained by productivity: fully loaded senior engineering cost in India runs at roughly a quarter to a third of United States levels, and Indian Tier-2 cities sit 25 to 40 per cent below Tier-1, so most of the observed gap is arbitrage rent and friction rather than output difference. Third, partial adoption is asymmetric in its incidence: the firms that adopt first are high-wage firms hiring the upper tail of the low-wage location, which produces convergence at the top of the distribution and divergence within the location, a pattern that mean-wage convergence tests will not detect. Fourth, and most consequentially for India, the country with the highest work-from-home intensity in the international evidence is the one whose major services firms have tightened office attendance most sharply. The article explains this as an intermediation effect rather than a productivity one: Indian services providers earn on the wedge between onshore client rates and their own delivery cost, and genuinely borderless hiring disintermediates them, whereas captive global capability centres face the opposite incentive. It concludes that convergence in a borderless market would run principally through onshore wage compression rather than offshore wage inflation, that an irreducible friction wedge survives in time zone, jurisdiction, data residency and client-facing presence, and that the policy question for India is whether it captures the arbitrage as a durable capability rent or holds it as a cost advantage that convergence will erase.
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📚 How to Cite:
Dr. N Subbukrishna Sastry, Dr. Manjula Mallya M , REMOTE WORK POLICY ADOPTION AND GEOGRAPHIC WAGE CONVERGENCE: WORK-LOCATION POLICY AS THE MEDIATOR OF WAGE ARBITRAGE IN SERVICES , Volume 12 , Issue 9, September 2026, EPRA International Journal of Multidisciplinary Research (IJMR) , Pages: 364 - 376 ,