IT shields: Technology adoption and economic resilience during the COVID-19 pandemic

Myrto Oikonomou, Nicola Pierri and Yannick Timmer

Labour Economics, 2023, vol. 81, issue C

Abstract: We study the labor market effects of information technology (IT) during the onset of the COVID-19 pandemic, using data on IT adoption covering almost three million establishments in the US. We find that in areas where firms had adopted more IT before the pandemic, the unemployment rate rose less in response to social distancing. IT shields all individuals, regardless of gender and race, except those with the lowest educational attainment. Instrumental variable estimates–leveraging historical routine employment share as a booster of IT adoption– confirm IT had a causal impact on fostering labor markets’ resilience. Additional evidence suggests this shielding effect is due to the easiness of working-from-home and to stronger creation of digital jobs in high IT areas.

Keywords: Unemployment rate; Technology; IT adoption; Inequality; Skill-biased technical change (search for similar items in EconPapers)
JEL-codes: E24 O33 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Related works:
Working Paper: IT Shields: Technology Adoption and Economic Resilience during the COVID-19 Pandemic (2023)
Working Paper: IT Shields: Technology Adoption and Economic Resilience during the Covid-19 Pandemic (2020)
Working Paper: IT Shields: Technology Adoption and Economic Resilience during the COVID-19 Pandemic (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:81:y:2023:i:c:s0927537123000052

DOI: 10.1016/j.labeco.2023.102330

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