How Digital Literacy Is Redefining Wages in Europe and Central Asia

A World Bank study finds that workers with advanced digital skills earn about 19 percent more on average across Europe and Central Asia, with even higher premiums in some lower income countries. Yet nearly 44 percent of adults in the region lack basic digital skills, highlighting a deep divide linked to education, income, gender and geography.

Across Europe and Central Asia, a new divide is shaping who earns more and who gets left behind. It is not only about formal education or job titles. It is about digital skills.

A World Bank study by the Poverty and Equity Global Department, using data from the European Bank for Reconstruction and Development’s Life in Transition Survey, shows that digital literacy has become a powerful driver of wages across 30 countries in the region. The research finds that workers with strong digital skills earn significantly more than those without them. In simple terms, knowing how to use computers and digital tools is no longer optional. It directly affects pay.

The Size of the Digital Divide

The study reveals a striking gap in digital ability. Nearly 44 percent of adults in the region say they have no digital skills at all. This means they cannot perform basic tasks such as copying files, sending emails with attachments, or installing simple software. Only about 35.5 percent report having high digital skills, including the ability to install programs and write computer code.

The differences between countries are large. In Central Europe and the Baltic States, almost half of adults have high digital skills. Germany stands out, with nearly two-thirds of people reporting advanced skills. Countries such as Czechia, Hungary and Poland also perform strongly.

In contrast, Central Asia lags far behind. Fewer than one in four adults there report high digital skills. Tajikistan and the Kyrgyz Republic have especially high shares of people with no digital abilities. The South Caucasus also faces major gaps.

In general, richer countries tend to have more digitally skilled populations. This shows how closely digital access and economic development are linked.

Who Gets Digital Skills and Why

Education plays the biggest role in determining who becomes digitally skilled. People with university degrees are more than 30 percentage points more likely to have high digital skills than those who did not finish upper secondary school. Even completing secondary education increases the chances.

Income also matters. People from households in the bottom 40 percent of the income distribution are much less likely to have advanced digital skills. In some regions, the gap reaches nearly 18 percentage points. Limited access to computers, internet connections and quality schools appears to hold many families back.

Family background adds another layer. Having well-educated parents, especially mothers, increases the likelihood of gaining strong digital skills. This suggests that digital inequality can pass from one generation to the next.

There are also clear gender and age gaps. Women are less likely than men to report high digital skills. Younger people are much more digitally capable than older adults. Urban residents have a clear advantage over those living in rural areas.

All these factors combine to create a digital divide that overlaps with existing social and economic inequalities.

The Payoff: Higher Wages

The most important finding is about earnings. Workers with high digital skills earn, on average, about 19 percent more than those with no digital skills, even after taking into account education, age, gender, job type and company characteristics. In some basic models, the premium is even higher.

The returns are not the same everywhere. In Central Asia, workers with advanced digital skills can earn up to 48 percent more than those without them. In Eastern Europe, the premium exceeds 26 percent. Central Europe and the South Caucasus also show strong positive returns.

However, in some parts of Southeast Europe, the Baltic States and the Western Balkans, the wage advantage is weaker once other factors are considered. At the country level, the differences are even more dramatic. In Uzbekistan, for example, the wage gains linked to digital skills are exceptionally high. In Moldova, both basic and advanced skills bring strong wage increases.

Interestingly, larger firms tend to reward digital skills more than smaller companies. Big firms often rely more heavily on digital systems, which increases the value of skilled workers. However, the wage advantage does not differ much between public, private and foreign firms, and it appears across different types of occupations.

Why This Matters for the Future

The study makes one thing clear. Digital skills are no longer a bonus. They are a key part of earning potential.

As economies become more digital, those without basic skills risk being locked out of better-paying jobs. The divide affects low-income households, rural communities, women and older workers the most.

If governments want inclusive growth, they will need to invest in digital education, improve access to affordable internet and devices, and support training programs for adults who missed out earlier.

In a world where work is increasingly connected to technology, the ability to use digital tools may be one of the most important skills a worker can have.