Digital capacity and employment outcomes: Microdata evidence from pre- and post-COVID-19 Europe

This paper examines the relationship between employment outcomes and broadband Internet access, education and digital skills using the pre- and post-COVID-19 survey waves of the Eurostat Community Statistics on Information Society from 2017, 2019, and 2021 in 27 European countries. Joint estimates of individuals’ employment status and skills employ external controls based on Eurostat and COVID-19 European Regional Tracker NUTS1-level regional statistics and Oxford COVID-19 Government Response Tracker information on governments’ containment and economic support measures. Broadband access, digital skills and educational attainment combine to raise employment outcomes, but COVID-19 has changed these relationships in distinct ways. It has increased employment benefits from formal education and roughly tripled the labor market advantages from having household members with tertiary education. The pandemic has increased the employment value of having at least some digital skills, while the relative benefits of more advanced digital skills shrank.