Digital Divide and the Opportunity Dimension of Economic Inequality: The Case of the Republic of Moldova

Abstract

Purpose: to analyse how the Republic of Moldova has been coping with digital inequality during the pandemic and the extent to which the digital divide has impacted the economic inequality in the country, as well as to understand what leads to digital disparities.

Study design/methodology/approach: In this research, the level of preparedness of the Moldovan households for the digitalization needs that occurred as a result of the pandemic and the both ways impact of the opportunity dimension of economic inequality and digital divide have been analysed, as well as how the lack of ICT utilities deprived certain social layers of economic opportunities during the pandemic. Concurrently, the causes of digital divide in the Republic of Moldova have been analysed to get a deeper understanding of the digital discrepancies that resulted in lack of economic opportunities.  For this purpose, the data on the access to mobile phones and computers, notebooks, tablets of Moldovan households and the connection to the Internet have been analysed and the digitalization trend has been contrasted with the disposable-income based economic inequality data (Gini index). The data used for the analysis have been retrieved from the National Bureaus of Statistics (NBS) of the Republic of Moldova and has been segregated per urban and rural areas as well as per quintiles. In addition, in order to understand the cause of digital divide and the impact on economic opportunity, we have added two more variables to the equation and namely, the absolute poverty and the employment indicator for the pandemic period (2019-2020).

Findings: Covid-19 found the Moldovan households unprepared for the digitalization needs generated by the pandemic. Even though deeper in the rural area, the digital divide has enhanced the economic inequality especially in the urban area during the early pandemic period. The high absolute poverty in the rural area and the increasing trend in the urban area, associated with a decreasing employment rate especially in the cities, represent a presumed outcome of the Moldovan digital unpreparedness which enhanced the economic inequality by affecting its opportunity dimension.

Originality/value: The novelty of the research is that the impact and interlink between two types of inequality (digital and economic) in the Republic of Moldova have been analysed with a special focus on the opportunity dimension of economic inequality.