We assess the effect of digitalisation on employment for the European Union countries, and Portugal in particular, using data for the 1995-2019 period. We estimate an augmented labour demand function derived from a Constant Elasticity of Substitution (CES) cost function to test for a capital-labour substitution effect, distinguishing between digital and traditional capital. The results point towards a positive impact of digital investments on total employment, but the effects are heterogeneous depending on the different employment categories. In particular, high-skilled jobs benefit from digitalisation at the expense of medium- and low-skilled ones.
