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Computers and Pay

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  • Green, Francis
  • Felstead, Alan
  • Gallie, Duncan
  • Zhou, Ying

Abstract

This paper describes the diffusion of computer use among jobs in Britain, and shows that the technology is having notable effects on the labour market. By 2006 three in four jobs entailed job-holders using computers, while for two in four jobs computer use was essential. Computing skills have a significant impact on pay but, in 2006, much of this effect is interactive with what we term ‘influence skills’. The average effect of a unit increase in the Computing Skills index (which ranges from 0 to 4) is to raise pay by an estimated 5.3 per cent and 6.0 per cent for men and women respectively. For men there is an additional 19.2 per cent boost to pay in establishments where at least three quarters of workers are working with computers, compared to establishments where no one uses computers. These effects are greater for those people in jobs with above-average influence skills requirements. Our estimates allow for education, a large number of other generic skills and other conventional controls, which makes them more robust to the critique that they are overestimates because they might suffer from omitted skill bias. IV estimates show only small differences from the OLS estimates. We also find that the direct and interactive effects of computer skills and influence skills have risen over the decade, indicating increased scarcity.

Suggested Citation

  • Green, Francis & Felstead, Alan & Gallie, Duncan & Zhou, Ying, 2007. "Computers and Pay," National Institute Economic Review, National Institute of Economic and Social Research, vol. 201, pages 63-75, July.
    • Handle: RePEc:cup:nierev:v:201:y:2007:i::p:63-75_9
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    Cited by:

    1. Francis Green & Alan Felstead & Duncan Gallie & Golo Henseke, 2016. "Skills and work organisation in Britain: a quarter century of change [Fertigkeiten, Fertigkeitsanforderungen und Arbeitsorganisation in Grossbritannien: Trends über das letzten Vierteljahrhundert]," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 49(2), pages 121-132, October.
    2. Peter Dolton & Panu Pelkonen, 2008. "The Wage Effects of Computer Use: Evidence from WERS 2004," British Journal of Industrial Relations, London School of Economics, vol. 46(4), pages 587-630, December.
    3. Mane, Ferran & Miravet, Daniel, 2016. "Using the job requirements approach and matched employer-employee data to investigate the content of individuals' human capital," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 49(2), pages 133-155.
    4. Vinod Mishra & Russell Smyth, 2014. "Technological Change and Wages in China: Evidence from Matched Employer–Employee Data," Review of Development Economics, Wiley Blackwell, vol. 18(1), pages 123-138, February.
    5. Simeon Yates & John Kirby & Eleanor Lockley, 2015. "Digital Media Use: Differences and Inequalities in Relation to Class and Age," Sociological Research Online, , vol. 20(4), pages 71-91, November.

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