Research Seminar
Digitalization during the Covid-19 Crisis: Implications for Productivity and Labor Markets in Advanced Economies
Discussion note: The pandemic accelerated digitalization and triggered a partial catch-up by less digitalized entities in advanced economies
Authors: Florence Jaumotte, Longji Li, Andrea Medici, Myrto Oikonomou, Carlo Pizzinelli, Ippei Shibata, Jiaming Soh, and Marina M. Tavares
Abstract of discussion note: Digitalization induced by the pandemic was seen both as a possible silver lining to the crisis that could increase longer-term productivity and a risk for further labor market inequality between digital and non-digital workers. This note shows that the pandemic accelerated digitalization and triggered a partial catch-up by less digitalized entities in advanced economies. Higher digitalization levels substantially shielded productivity and hours worked during the crisis. However, the extent to which 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.
Presenter: Marina M. Tavares
Marina M. Tavares is an Economist in the Climate Change Structural Reforms Division of the IMF’s Research Department. Before joining RES, Marina led the working group on the interconnections between macroeconomic policy and inequality under FCDO-IMF Collaboration. Her research interests include macroeconomics, climate change, gender, and inequality. Before joining the Fund, Ms. Tavares worked as an assistant professor at Instituto Tecnologico Autonomo de Mexico (ITAM), and she holds a Ph.D. in Economics from the University of Minnesota.
Abstract of discussion note: Digitalization induced by the pandemic was seen both as a possible silver lining to the crisis that could increase longer-term productivity and a risk for further labor market inequality between digital and non-digital workers. This note shows that the pandemic accelerated digitalization and triggered a partial catch-up by less digitalized entities in advanced economies. Higher digitalization levels substantially shielded productivity and hours worked during the crisis. However, the extent to which 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.
Presenter: Marina M. Tavares
Marina M. Tavares is an Economist in the Climate Change Structural Reforms Division of the IMF’s Research Department. Before joining RES, Marina led the working group on the interconnections between macroeconomic policy and inequality under FCDO-IMF Collaboration. Her research interests include macroeconomics, climate change, gender, and inequality. Before joining the Fund, Ms. Tavares worked as an assistant professor at Instituto Tecnologico Autonomo de Mexico (ITAM), and she holds a Ph.D. in Economics from the University of Minnesota.