Regional economic disparities in the aftermath of the COVID-19 outbreak: the role of digitalization and working-from-home

• Applicants: Dr. Sarra Ben Yahmed; Professor Dr. Rolf Sternberg
• Subject Area: Human Geography ; Economic Policy, Applied Economics
• Term: since 2021
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 458454974

This project aims to analyse the impact of the COVID-19 crisis on regional labour markets and firm dynamics in Germany and on their disparities within and between regions. In particular, we plan to investigate the role of digitalization for the varying regional responses to the crisis. Indeed many firms and workers have invested in digital technologies and adopted remote working since the start of the pandemic. These factors are likely to have significant impacts regional labour markets and firm structure in both the short and long term, while the different opportunities to use digital technologies is likely to affect inequalities. The project consists of five working packages (WP). First, we investigate how differences in digitalization, working-from-home arrangements and exposure to international trade have affected the regional employment responses to the crisis and employment inequalities within regions (WP1). Second, we investigate whether disparities between urban and rural regions have increased in the aftermath of the Covid-19 outbreak and highlight the role played by the digital infrastructure and digital competences of individuals and firms for the resilience and economic development of selected rural regions (WP 2 and WP3). Third, we analyse the effects on regional firm dynamics looking at firms’ responses to the crisis and by evaluating the impacts of the implemented public aid measures for small businesses (WP4 and WP5). While the focus of the project is on the short to medium run effects on regional economic development, the results are expected to be informative about the possible future evolution of disparities within and between regions. The results will also bring novel insights for national, regional and local governments in Germany that are responsible for regional policies. Policymakers will get, in particular, evidence-based arguments in favour of strategies and instruments aiming to improve the situation of rural regions in COVID-19 era, as a complement to national policies assisting individuals and firms. The project applies a dedicated mix of quantitative and qualitative data collection and data analysis. The research team is diverse in terms of academic fields so that the comparative advantages of economists and geographers, enriched by sociologists in a specific workshop, will be exploited in an optimal division of labour.

• DFG Programme: Research Grants