Skip to main content

The Impact of Digitalization on Unemployment During Covid-19 Pandemic

  • Conference paper
  • First Online:
Digital Economy. Emerging Technologies and Business Innovation (ICDEc 2022)

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.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Subscribe and save

Springer+ Basic
$34.99 /Month
  • Get 10 units per month
  • Download Article/Chapter or eBook
  • 1 Unit = 1 Article or 1 Chapter
  • Cancel anytime
Subscribe now

Buy Now

Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Similar content being viewed by others

References

  1. OECD: Digital Transformation in the age of Covid 19. https://www.oecd.org/digital/digital-economy-outlook-covid.pdf (2020). Last accessed 5 Dec 2021

  2. Jackson, J., Weiss, M., Schwarzenberg, A., Nelson, R., Sutter, K., Sutherland, M.: Global Economic Effects of Covid-19. Congressional Research Service Report, Library of Congress (2021)

    Google Scholar 

  3. Mou, J.: Research on the impact of Covid-19 on global economy. IOP Conf.: Earth Environ. Sci. Ser. 546, 032043 (2020)

    Google Scholar 

  4. Xiang, S., Rasool, S., Hang, Y., Javid, K., Javed, T., Artene, A.E.: The effect of COVID-19 pandemic on service sector sustainability and growth. Front. Psychol. 12, 633597 (2021). https://doi.org/10.3389/fpsyg.2021.633597. Last accessed 8 Dec 2021

    Article  Google Scholar 

  5. Cénat, J.M., Dalexis, R.D., Kokou-Kpolou, C.K., Mukunzi, J.N., Rousseau, C.: Social inequalities and collateral damages of the COVID-19 pandemic: when basic needs challenge mental health care. Int. J. Public Health 65, 717–718 (2020)

    Article  Google Scholar 

  6. Melhem, S., Carugati, A., Jackobsen, A., Cassabgui, J., Khanji, T., Khoury, Z.: Shaping the Future of Work: Three Challenges for SMART work transformation in the Post Covid-19 era (2021). https://blogs.worldbank.org/digital-development/shaping-future-work-three-challenges-smart-work-transformation-post-covid-19. Last accessed 1 Jan 2022

  7. Morudu, P., Kollamparambil, U.: Health shocks, medical insurance and household vulnerability: evidence from South Africa. PLoS ONE 15(2), e0228034 (2020). https://doi.org/10.1371/journal.pone.0228034

    Article  Google Scholar 

  8. Hanna, D., Huang, Y.: The Impact of SARS on Asian Economies. Asian Econ. Papers 3, 102–112 (2004)

    Article  Google Scholar 

  9. Islam, A., Parasnis, J.: Heterogeneous Effects of Health Shocks in Developed Countries: Evidence from Australia. Monash Business School, Australia (2017)

    Google Scholar 

  10. Brown, K., Richard, M., Smith, R.: The economic impact of SARS: how does the reality match the predictions? Health Policy 88(1), 110–120 (2008)

    Article  Google Scholar 

  11. Lee, G., Warner, M.: Unemployment: the impact of the SARS epidemic on the service sector in Singapore. Asian Pac. Bus. Rev. 12, 507–527 (2007)

    Article  Google Scholar 

  12. Lenhart, O.: The effects of health shocks on labor market outcomes: evidence from UK panel data. Eur. J. Health Econ. 20(1), 83–98 (2018)

    Article  Google Scholar 

  13. Aleksandrova, E., Bagranova, V., Gerry, C.: The effect of health shocks on labour market outcomes in Russia. Camb. J. Econ. 45, 1319–1336 (2021)

    Google Scholar 

  14. Mein, S.A.: COVID-19 and health disparities: the reality of “the great equalizer.” J. Gen. Intern. Med. 35, 2439–2440 (2020)

    Article  Google Scholar 

  15. Singh, B., Chattu, V.K.: Prioritizing ‘equity’ in COVID-19 vaccine distribution through Global Health Diplomacy. Health Promot. Perspect. 11(3), 281–287 (2021)

    Article  Google Scholar 

  16. Jones, B., Jones, J.: Gov. Cuomo is wrong; covid-19 is anything but an equalizer Washington Post. https://www.washingtonpost.com/outlook/2020/04/05/gov-cuomo-is-wrong-covid-19-is-anything-an-equalizer/ (2020). Last accessed 20 Dec 2021

  17. Azzam, A.-R., Ibrahim, D.: Analysis of mobility trends during the COVID-19 coronavirus pandemic: exploring the impacts on global aviation and travel in selected cities. Energy Res. Soc. Sci. 68, 101693 (2020)

    Article  Google Scholar 

  18. Al-Fadly, A.: Impact of COVID-19 on SMEs and employment. Entrepreneurship Sustain. Issues 8(2), 629–648 (2020)

    Article  Google Scholar 

  19. Uvarova, E., Pobol, P.: SMEs Digital Transformation in the EaP countries in COVID-19 Time: Challenges and Digital Solutions. https://eap-csf.eu/wp-content/uploads/SMEs-digital-transformation-in-the-EaP-countries-during-COVID-19.pdf (2021). Last accessed 28 Dec 2021

  20. World Economic Forum Homepage (2021). https://www.weforum.org/agenda/2021/07/pandemic-damaged-youth-employment/. Last accessed 22 Dec 2021

  21. AARP Homepage (2021). https://www.aarp.org/work/job-search/info-2020/job-losses-during-covid.html. Last accessed 4 Jan 2021

  22. Thebault, R., Tran, A., Williams, V.: African Americans are the higher risk of deaths from coronavirus, The Washington Post. https://www.washingtonpost.com/nation/2020/04/07/coronavirus-is-infecting-killing-black-americans-an-alarmingly-high-rate-post-analysis-shows/ (2020). Last accessed 22 Dec 2021

  23. Christian, S.C., Alexander, L., Tomás, C.: Cause for concerns: gender inequality in experiencing the COVID-19 lockdown in Germany. Eur. Soc. J. 23, 68–81 (2020)

    Google Scholar 

  24. Dang, H.-A.H., Nguyen, C.V.: Gender inequality during the COVID-19 pandemic: Income, expenditure, savings, and job loss. World Dev. 140, 105296 (2021). https://doi.org/10.1016/j.worlddev.2020.105296

    Article  Google Scholar 

  25. Pereira, M., Oliveira, A.M.: Poverty and food insecurity may increase as the threat of COVID-19 spreads. Public Health Nutr. 23(17), 3236–3240 (2020)

    Article  Google Scholar 

  26. Niles, M.T., Bertmann, F., Belarmino, E.H., Wentworth, T., Biehl, E., Neff, R.: The early food insecurity impacts of COVID-19. Nutrients 12, 2096 (2020)

    Article  Google Scholar 

  27. Emon, E.K.H., Alif, A.R., Shahanul Islam, M.: Impact of COVID-19 on the institutional education system and its associated students in Bangladesh. Asian J. Educ. Soc. Stud. 11(2), 34–46 (2020)

    Article  Google Scholar 

  28. World Economic Forum Homepage (2020). https://www.weforum.org/agenda/2020/12/covid19-education-innovation-outcomes/. Last accessed 2 Jan 2022

  29. Strusani, D., Houngbonon, G.V.: What COVID-19 Means for Digital Infrastructure in Emerging Markets. EMCompass; No. 83. International Finance Corporation, Washington, DC. https://openknowledge.worldbank.org/handle/10986/34306 (2020). License: CC BY-NC-ND 3.0 IGO, Last accessed 18 Dec 2021

  30. Version 1: The importance of Digital Transformation During Covd-19 (2021). https://www.version1.com/blog-digital-transformation-covid-19/. Last accessed 13 Dec 2021

  31. Amankwah-Amoah, J., Khan, Z., Wood, G., Knight, G.: Covid-19 and digitalization: the great acceleration. J. Bus. Res. 136, 602–611 (2021)

    Article  Google Scholar 

  32. Baig, A., Hall, B., Jenkins, P., Lamarre, E., McCarthy, B.: The covid-19 recovery will be digital: A plan for the first 90 days (2020). https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/the-covid-19-recovery-will-be-digital-a-plan-for-the-first-90-days. Last accessed 11 Dec 2021

  33. Wang, B., Liu, Y., Qian, J., Parker, S.K.: Achieving effective remote working during the COVID-19 pandemic: a work design perspective. Appl. Psychol. 70, 16–59 (2021)

    Article  Google Scholar 

  34. Cooper, Z.: Five reasons why digital transformation is essential for business growth. https://www.itpro.co.uk/strategy/29899/three-reasons-why-digital-transformation-is-essential-for-business-growth (2021). Last accessed 7 Dec 2021

  35. Guermazi, B.: Digital Transformation in the time of COVID-19: the case of MENA. https://blogs.worldbank.org/arabvoices/digital-transformation-time-covid-19-case-mena (2020). Last accessed 19 Dec 2021

  36. International Fund for Agricultural Development Homepage: https://www.ifad.org/en/covid19. Last accessed 5 Jan 2022

  37. Worldometer Homepage: https://www.worldometers.info/coronavirus/. Last accessed 31 Dec 2021

  38. Surfshark Homepage. https://www.surfshark.com/. Last accessed 10 Dec 2021

  39. Blasius, B.: Power-law distribution in the number of confirmed COVID-19 cases. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7519452/ (2020). Last accessed 5 Jan 2022

  40. World Bank Development Indicators Homepage: https://databank.worldbank.org/source/world-development-indicators. Last accessed 7 Dec 2021

  41. Statistica Homepage: https://www.statista.com/. Last accessed 23 Dec 2021

  42. Macrotrends Homepage: https://www.macrotrends.net/. Last accessed 14 Dec 2021

  43. Baltagi, B.: Econometric Analysis of Panel Data, 4th edn. Wiley, USA (2008)

    MATH  Google Scholar 

  44. Wei, M.: Social distancing and lockdown - an introvert’s paradise? an empirical investigation on the association between introversion and the psychological impact of COVID19-related circumstantial changes. Front. Psychol. J. 11, 561609 (2020)

    Article  Google Scholar 

  45. Brouste, A.: Generalized linear model. https://www.sciencedirect.com/topics/economics-econometrics-and-finance/generalized-linear-model (2018). Last accessed 5 Jan 2022

  46. Kundu, A.: What is so general about generalized linear model? https://towardsdatascience.com/what-is-so-general-about-generalized-linear-model-15dde9be2640 (2021). Last accessed 5 Jan 2022

  47. Vasconcelos, G., Macedo, A., Filho, G., Brum, A., Ospina, R., Almeida, F.: Power law behaviour in the saturation regime of fatality curves of the covid-19 pandemic. Sci. Rep. 11, 4619 (2021). https://doi.org/10.1038/s41598-021-84165-1

    Article  Google Scholar 

  48. Hai, T.N., Van, Q.N., Tuyet, M.N.T.: Digital transformation: opportunities and challenges for leaders in the emerging countries in response to COVID-19 pandemic. Emerg. Sci. J. 5, 21–36 (2021)

    Article  Google Scholar 

  49. Brynjolfsson, E., McAfee, A.: Race against the machine: How the digital revolution is accelerating innovation, driving productivity, and irreversibly transforming employment and the economy (2011)

    Google Scholar 

  50. Human Development Report Homepage: https://hdr.undp.org/. Last accessed 8 Jan 2022

Download references

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Mohammad Makki .

Editor information

Editors and Affiliations

Rights and permissions

Reprints and permissions

Copyright information

© 2022 The Author(s), under exclusive license to Springer Nature Switzerland AG

About this paper

Check for updates. Verify currency and authenticity via CrossMark

Cite this paper

Haykal, S.H., Makki, M. (2022). The Impact of Digitalization on Unemployment During Covid-19 Pandemic. In: Bach Tobji, M.A., Jallouli, R., Strat, V.A., Soares, A.M., Davidescu, A.A. (eds) Digital Economy. Emerging Technologies and Business Innovation. ICDEc 2022. Lecture Notes in Business Information Processing, vol 461. Springer, Cham. https://doi.org/10.1007/978-3-031-17037-9_1

Download citation

  • DOI: https://doi.org/10.1007/978-3-031-17037-9_1

  • Published:

  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-031-17036-2

  • Online ISBN: 978-3-031-17037-9

  • eBook Packages: Computer ScienceComputer Science (R0)

Publish with us

Policies and ethics