IT Shields: Technology Adoption and Economic Resilience during the COVID-19 Pandemic

September 25, 2020

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Format: Chicago

Nicola Pierri, and Yannick Timmer. IT Shields: Technology Adoption and Economic Resilience during the COVID-19 Pandemic, (USA: International Monetary Fund, 2020) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

We study the economic effects of information technology (IT) adoption during the COVID-19 pandemic. Using data on IT adoption covering almost three million establishments in the US, we find that technology adoption can partly shield the economy from the impact of the pandemic. In areas where firms adopted more IT the unemployment rate rose less in response to social distancing. Our estimates imply that if the pandemic had hit the world 5 years ago, the resulting unemployment rate would have been 2 percentage points higher during April and May 2020 (16% vs. 14%), due to the lower availability of IT. Local IT adop-tion mitigates the labor market consequences of the pandemic for all individuals, regardless of gender and race, except those with the lowest level of educational attainment.

Subject: COVID-19, Education, Health, Labor, Technology, Unemployment, Unemployment rate

Keywords: Adoption dummy, Adoption measure, Adoption pattern, Adoption state, COVID-19, Europe, Global, Inequality, IT adopter, IT adoption, IT budget, Skill-Biased Technical Change, Technology, Unemployment, Unemployment rate, WP

Publication Details

Pages:

41
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2020/208
Stock No:

WPIEA2020208
ISBN:

9781513557755
ISSN:

1018-5941

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