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Digitalization During the COVID-19 Crisis: Implications for Productivity and Labor Markets in Advanced Economies

Author

Listed:
  • Ms. Florence Jaumotte
  • Longji Li
  • Andrea Medici
  • Myrto Oikonomou
  • Carlo Pizzinelli
  • Mr. Ippei Shibata
  • Jiaming Soh
  • Ms. Marina Mendes Tavares

Abstract

Digitalization induced by the pandemic was seen both as a possible silver-lining from the crisis that could increase longer-term productivity and a risk for further labor market inequality between digital and non-digital workers. The note shows that the pandemic accelerated digitalization and triggered a partial catch-up by less digitalized entities in advanced economies. Higher digitalization levels shielded substantially productivity and hours worked during the crisis. However, the extent to which the pandemic-induced digitalization led to structural change in the economy is less clear. Less digitalized sectors have rebounded more strongly, albeit after stronger declines, and while workers in digital occupations were more shielded from the crisis, there does not appear to be a structural change in the composition of labor demand. Meanwhile, shifts in labor supply are more likely to be permanent, driven by the increase in working from home.

Suggested Citation

  • Ms. Florence Jaumotte & Longji Li & Andrea Medici & Myrto Oikonomou & Carlo Pizzinelli & Mr. Ippei Shibata & Jiaming Soh & Ms. Marina Mendes Tavares, 2023. "Digitalization During the COVID-19 Crisis: Implications for Productivity and Labor Markets in Advanced Economies," IMF Staff Discussion Notes 2023/003, International Monetary Fund.
    • Handle: RePEc:imf:imfsdn:2023/003
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    Cited by:

    1. Liviu Andrei Toader & Dorel Mihai Paraschiv & Florentina Chițu, 2023. "The Effects of Individuals’ Levels of Computer Skills on the ICT Sector Employment in the European Union during the COVID-19 Pandemics," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 26(85), pages 67-77, June.

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