The Pandemic Push: Digital Technologies and Workforce Adjustments

51 Pages Posted: 14 Apr 2023

See all articles by Christina Gathmann

Christina Gathmann

Luxembourg Institute for Socio-Economic Research; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute)

Christian Kagerl

Government of the Federal Republic of Germany - Institute for Employment Research (IAB); University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg

Laura Pohlan

Institute for Employment Research (IAB); affiliation not provided to SSRN

Duncan Roth

Institute for Employment Research (IAB)

Abstract

Based on a unique survey and administrative employer-employee data, we show that the COVID-19 pandemic acted as a push factor for the diffusion of digital technologies in Germany. About two in three firms invested in digital technologies, in particular in hardware and software to enable decentralized communication, management and coordination. The investments encouraged additional firm-sponsored training despite pandemic-related restrictions indicating that investments in digital technologies and training are complements. We then demonstrate that the additional investments helped firms to insure workers against the downturn during the pandemic. Firms that made additional investments relied less on short-time work, had more of their regular employees working normal hours and had to lay off fewer marginal workers. Male, younger and medium-skilled workers benefitted the most from the insurance effect of digital investments.

Keywords: innovation, digital technologies, COVID-19, pandemic, investment, training, employment, worker flows

JEL Classification: D22, E22, J23, J63

Suggested Citation

Gathmann, Christina and Kagerl, Christian and Pohlan, Laura and Pohlan, Laura and Roth, Duncan, The Pandemic Push: Digital Technologies and Workforce Adjustments. IZA Discussion Paper No. 16062, Available at SSRN: https://ssrn.com/abstract=4416821 or http://dx.doi.org/10.2139/ssrn.4416821

Christina Gathmann (Contact Author)

Luxembourg Institute for Socio-Economic Research ( email )

11, Porte des Sciences
Campus Belval – Maison des Sciences Humaines
Esch-sur-Alzette, L-4366
Luxembourg

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

HOME PAGE: http://www.iza.org/index_html?lang=en&mainframe=http%3A//www.iza.org/en/webcontent/personnel/photos%

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.stanford.edu/~cgathman

Christian Kagerl

Government of the Federal Republic of Germany - Institute for Employment Research (IAB)

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg

Schloßplatz 4
Erlangen, DE Bavaria 91054
Germany

Laura Pohlan

Institute for Employment Research (IAB) ( email )

Regensburger Str. 104
Nuremberg, 90478
Germany

affiliation not provided to SSRN

Duncan Roth

Institute for Employment Research (IAB) ( email )

Regensburger Str. 100
Nuremberg, Bavaria 90478
Germany

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