How digitalization during COVID-19 transformed productivity and labor markets

The Peterson Institute for International Economics (PIIE) and the International Monetary Fund (IMF) held a discussion on digitalization during the COVID-19 crisis with Florence Jaumotte (International Monetary Fund), Barbara Kotschwar (Visa US) and Anton Korinek (University of Virginia), followed by a Q&A with PIIE senior fellow Martin Chorzempa.

Digitalization induced by the pandemic was seen both as a possible silver lining to the crisis that could increase longer-term productivity and a risk for further labor market inequality between digital and non-digital workers. Yet, the consequences of this pandemic-induced digitalization remain largely unknown. A new International Monetary Fund (IMF) Staff Discussion Note sheds light on the potential implications of this transformation for productivity and labor markets in advanced economies. It documents the evolution of digitalization during the crisis, quantifies its impact on productivity and hours worked across sectors, and examines the implications of rising digitalization for labor demand and labor supply, including the potential for remote work to boost labor force participation.

PRESENTER
Florence Jaumotte
Acting Division Chief of the Structural and Climate Policies Division, Research Department, IMF

DISCUSSANTS
Barbara Kotschwar
Executive Director, Visa Economic Empowerment Institute, Visa US

Anton Korinek
Professor, Department of Economics and Darden School of Business, University of Virginia