Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/300042 
Year of Publication: 
2024
Series/Report no.: 
CESifo Working Paper No. 11114
Publisher: 
CESifo GmbH, Munich
Abstract: 
We show that digital capital and working from home were essential for the resilience of local labour markets in the context of the COVID-19 crisis in Germany. Employment responses differed widely across local labour markets, with differences in short-time work rates of up to 30 percentage points at the beginning of the pandemic. Using recent advancements in the difference-in-differences approach with a continuous treatment, we find that pre-crisis digital capital potential reduced short-time work rate by up to 3 percentage points. The effect was nonlinear, disproportionately disadvantaging regions at the lower end of the digital capital distribution for a longer period. One channel of impact is working from home, which was more often adopted in regions with higher digital capital. But digital capital smoothed the employment shock beyond the effect of remote work.
Subjects: 
Covid-19
crisis
digitalisation
employment
information and communication technologies
local labour markets
resilience
short-time work
working from home
JEL: 
J21
O30
R12
R23
Document Type: 
Working Paper
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