The Impact of Digitalization on Unemployment During Covid-19 Pandemic

ABSTRACT

The Covid19 pandemic that hit the world turned to be far more than a health crisis;the lock downs and the untraditional measures that were taken by most of the countries of the world to decrease the spread of the virus changed the form of our daily activities, and resulted in major socio-economic challenges. Although many businesses and institutions shifted to online mode in several sectors and industries, the lack of solid digital technologies and communications infrastructure made it hard for other countries to cope with the new global reality [1]. This paper claims that digitalized countries;countries with higher Digital Quality of Life (DQL) Index that is developed by the cyber security Company Surfshark in 2019, reported lower increase in their unemployment rate. The paper also claims that higher Covid19 annual cases lead to higher increase in unemployment rates. A Generalized Linear Model, for a sample of 59 countries including 118 panel data observations, was adopted to test the paper’s claims. The regression results revealed that there is a significant inverse relationship between DQL index and the percentage change in the unemployment rate, yet the positive coefficient between the percentage change in Covid19 cases and the percentage change in the unemployment rate is insignificant. © 2022, The Author(s), under exclusive license to Springer Nature Switzerland AG.