Digital Skills as Europe’s Pandemic Shock Absorber : Did EU countries and sectors with higher levels of digital skills experience milder economic consequences during the COVID-19 pandemic?

Sammanfattning

This thesis investigates whether digital skills contributed to economic resilience during the COVID-19 pandemic across European Union (EU) countries and sectors. Using harmonised Eurostat panel data for 2016–2024, the study applies a two-way fixed-effects framework with interactions between pre-pandemic digital-skill levels (measured in 2019) and year indicators to trace differential productivity dynamics relative to the 2019 baseline. The main analysis is conducted at the country–sector level and complemented by country-level regressions. Results indicate that digitally intensive sectors experienced relatively stronger productivity performance during the later stages of the pandemic, with statistically significant effects emerging in 2022, while estimates for 2020 and 2021 are positive but not statistically significant, and no systematic differences are observed prior to the crisis. Country-level results are less robust and display substantial pre-trend differences. The mechanism analysis further shows that higher digital-skill levels are associated with more persistent increases in remote work adoption. Overall, the findings suggest that digital skills supported medium-term adjustment rather than immediate shock absorption during the pandemic.