Covid-19 and digital inclusion: Impact on employment

Abstract

The employment sector has suffered an abrupt decline in labour force participation since COVID-19 started. Digital platforms offer virtual workspace, enable remote working, and thus remain the only alternative to maintain stability in the labour market during the lockdown period. Since levels of digital inclusion vary among countries, the pandemic-led employment shocks also differ across countries. This study examines a cross-sectional dataset of 93 countries and analyses the impact of digital inclusion on employment shock during the COVID-19 pandemic using regression analysis. The estimation result suggests that digital inclusion has a significant favourable effect on employment growth in the pandemic. For one unit of increase in the digital inclusion index at the mean value of confirmed COVID-19 cases in natural logarithm, employment growth rises by 0.078 %. This favourable impact remains significant for both high- and low-income countries and is more pronounced in high-income countries. This study provides much-needed cross-country evidence on the importance of digital inclusion for stabilizing employment during the pandemic and helps inform future theoretical work on this issue.