The Effects of Digital Literacy on Wages in Europe and Central Asia

Metin Nebiler and Kyunglin Park

No 11308, Policy Research Working Paper Series from The World Bank

Abstract: Digital skills are becoming increasingly more important in the labor market as demand for them is increasing in all sectors. This paper explores the determinants of digital skill acquisition and estimates the impact of digital skills on wages in developing countries by using the latest round of the Life in Transition Survey from 30 countries in the Europe and Central Asia region. The results show that acquisition of digital skills is correlated with individual characteristics including age, education, and gender but also with household characteristics such as household income, place of residence, and parents’ educational attainment. These disparities translate directly into labor market outcomes: individuals with advanced digital skills earn, on average, 18.9 percent higher wages than those without such skills, with substantial heterogeneity within and between regions. The wage premium for high digital skills is higher in Central Asia, the South Caucasus, Eastern Europe, and Central Europe. Moreover, the results show that larger firms offer significantly higher premiums for digital skills.

Date: 2026-02-10
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