Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/262377 
Year of Publication: 
2022
Series/Report no.: 
ZEW Discussion Papers No. 22-031
Publisher: 
ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung, Mannheim
Abstract: 
Employment responses to the COVID-19 crisis differed widely across German local labour markets at the beginning of the pandemic, with differences in short-time work rates of up to 20 percentage points. We show that digital capital, and to a lesser extent working-from-home, were essential for the resilience of local labour markets. Using an empirical strategy that combines a difference-in-differences approach with propensity score weighting, we find that local exposure to digital capital reduced short-time work usage by up to 4 percentage points and the effect lasted for about 8 months. Working-from-home potential lowered short-time work rates, but only in local labour markets exposed to digital capital, and in the first four months of the pandemic when a strict lockdown was in place. Differences in unemployment rates across local labour markets were at most 2 percentage points and did not depend on digital capital or working-from-home potential.
Subjects: 
COVID-19 crisis
Digitalisation
Employment
Information and communication technologies
Local labour markets
Short-time work
Working-from-home
JEL: 
J21
O3
R12
R23
Document Type: 
Working Paper

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