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


Florence Jaumotte ; Longji Li ; Andrea Medici ; Myrto Oikonomou ; Carlo Pizzinelli ; Ippei Shibata ; Jiaming Soh ; Marina M. Tavares

Publication Date:

March 13, 2023

Electronic Access:

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Disclaimer: This Staff Discussion Note represents the views of the authors and does not necessarily represent IMF views or IMF policy. The views expressed herein should be attributed to the authors and not to the IMF, its Executive Board, or its management. Staff Discussion Notes are published to elicit comments and to further debate.


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.


Staff Discussion Notes No. 2023/003





Publication Date:

March 13, 2023



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