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Digitalization During the COVID-19 Crisis: Implications for Productivity and Labor Markets in Advanced Economies
Author:
Ms. Florence Jaumotte https://isni.org/isni/0000000404811396 International Monetary Fund

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,
Longji Li
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,
Andrea Medici
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Myrto Oikonomou
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Carlo Pizzinelli https://isni.org/isni/0000000404811396 International Monetary Fund

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Mr. Ippei Shibata https://isni.org/isni/0000000404811396 International Monetary Fund

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,
Jiaming Soh
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Ms. Marina Mendes Tavares
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Series:
Staff Discussion Notes
Volume/Issue:
Volume 2023: Issue 003
Language:
English
Publication Date:
13 Mar 2023
DOI:
https://doi.org/10.5089/9798400232596.006
ISBN:
9798400231278
ISSN:
2617-6750
Pages:
42
Keywords:
Digitalization; COVID-19; labor market; productivity; productivity regression analysis; digitalization level; longer-term productivity; pandemic-induced digitalization; labor market tightness; Labor productivity; Labor markets; Total factor productivity; Europe
Legal-disclaimer:
Staff Discussion Notes (SDNs) showcase policy-related analysis and research being developed by IMF staff members and are published to elicit comments and to encourage debate.The views expressed in this Policy Discussion Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy.
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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.
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Cover Staff Discussion Notes
Staff Discussion Notes
ISSN:
2617-6750
Publisher:
International Monetary Fund