The pandemic push: Digital technologies and workforce adjustments

Using a novel firm survey matched to administrative employee records, we demonstrate that the COVID-19 pandemic was a push factor for the diffusion of digital technologies in Germany. Two out of three firms invested in digital technologies. Three quarters of those investing firms invested because of...

Full description

Saved in:
Bibliographic Details
Published in:Labour economics 2024-08, Vol.89, p.102541, Article 102541
Main Authors: Gathmann, Christina, Kagerl, Christian, Pohlan, Laura, Roth, Duncan
Format: Article
Language:English
Subjects:
COVID-19 pandemic
Digital technologies
Employment
Investment
Training
Worker flows
Citations: Items that this one cites
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Using a novel firm survey matched to administrative employee records, we demonstrate that the COVID-19 pandemic was a push factor for the diffusion of digital technologies in Germany. Two out of three firms invested in digital technologies. Three quarters of those investing firms invested because of the pandemic, particularly in hardware and software to enable decentralized communication, management, and coordination. These investments also fostered additional firm-sponsored training, underscoring the complementarity between investments in digital technologies and training. We then show that the investments helped firms insure their workers against the economic downturn. Firms with additional digital investments retained more of their employees on regular working hours and relied less on short-time work. Low- and medium-skilled, as well as young workers, benefited the most from the insurance effect of digital investments. •How the pandemic pushed firms to invest in new digital technologies.•Workforce composition and firm size are important determinants of investments.•Investments in digital technologies and training needs and activities are complements.•Digital tools helped firms smooth employment of regular workers and reduce short-time work.
ISSN:0927-5371
1879-1034
DOI:10.1016/j.labeco.2024.102541