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Determinants of Employment in the Digital Economy: Evidence from EU Countries with Implications for Inclusive Labour Market and Sustainable Development

Year: 2026

Type: article

Abstract: This study examines the impact of digitalisation, innovation activity, demographic factors, and macroeconomic variables on employment in European Union countries within the framework of sustainable development. The empirical analysis is based on Eurostat panel data for 2015–2023 and applies regression analysis to identify the key determinants of employment. The results indicate that digitalisation demonstrates the strongest positive statistical association with employment, confirming its important role in labour market transformation and inclusive economic development. Expenditures on research and development also show a positive effect, highlighting the significance of innovation activity for employment growth. At the same time, GDP per capita does not exhibit a statistically significant relationship with employment, while education expenditure demonstrates a negative short-term effect. The findings suggest that digitalisation and innovation contribute not only to employment growth but also to the expansion of labour market participation opportunities for diverse social groups. The study contributes to the analysis of SDG 8 (Decent Work and Economic Growth), SDG 9 (Industry, Innovation and Infrastructure), and SDG 10 (Reduced Inequalities) by identifying the structural factors associated with employment dynamics in the digital economy.

Source: Sustainability

DOI: 10.3390/su18115246

Authors: Olena Ivashko, Iryna Tsymbaliuk, Nataliia Pavlikha, Kamila Ćwik, Piotr Czarnecki

Institutions: University of Economics and Innovation, Lesya Ukrainka Volyn National University, Lutsk National Technical University, National-Louis University

Language: English

Topic: Digital Economy and Transformation

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Decent work and economic growth, Reduced inequalities, Industry, innovation and infrastructure

Open Access status: gold

Estimated APC paid: $2,896