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The impact of computer use on earnings in a developing country: Evidence from Ecuador

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Author Info

  • Oosterbeek, Hessel
  • Ponce, Juan

Abstract

This paper examines the earnings premium to computer use in a developing country: Ecuador. We use different approaches to examine whether the premium is causal. Controlling for an extensive set of observables, we find an earnings difference between users and non-users of around 20%. Using first differences, the premium drops and is no longer significant in a specification that includes proxies for workers' computer experience and knowledge. Estimates of the impact of the intensity of computer use are also small and in most cases insignificant. Estimates of the pencil premium are substantial in level specifications, but become insignificant in fixed effect specifications. Taken together, also in the setting of a developing country we do not find evidence in favour of the computer premium reflecting a causal impact.

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Bibliographic Info

Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 18 (2011)
Issue (Month): 4 (August)
Pages: 434-440

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Handle: RePEc:eee:labeco:v:18:y:2011:i:4:p:434-440

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Web page: http://www.elsevier.com/locate/labeco

Related research

Keywords: Computers Earnings inequality Developing country Ecuador;

References

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  1. Entorf, Horst & Gollac, Michel & Kramarz, Francis, 1999. "New Technologies, Wages, and Worker Selection," Journal of Labor Economics, University of Chicago Press, vol. 17(3), pages 464-91, July.
  2. Chris Sakellariou, 2009. "Endogeneity, computers, language skills and wages among university graduates in Vietnam," Applied Economics, Taylor & Francis Journals, vol. 41(5), pages 653-663.
  3. Chris N. Sakellariou & Harry A. Patrinos, 2004. "Technology, computers and wages: evidence from a developing economy," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 47(3-4), pages 543.
  4. Miller, Paul & Mulvey, Charles, 1997. "Computer Skills and Wages," Australian Economic Papers, Wiley Blackwell, vol. 36(68), pages 106-13, June.
  5. Krueger, Alan B, 1993. "How Computers Have Changed the Wage Structure: Evidence from Microdata, 1984-1989," The Quarterly Journal of Economics, MIT Press, vol. 108(1), pages 33-60, February.
  6. Choi, K.S., 1993. "Technological Change and Educational Wage Differentials in Korea," Papers 698, Yale - Economic Growth Center.
  7. G. R. Arabsheibani & J. M. Emami & A. Marin, 2004. "The Impact of Computer Use On Earnings in the UK," Scottish Journal of Political Economy, Scottish Economic Society, vol. 51(1), pages 82-94, 02.
  8. Barry Chiswick & Paul Miller, 2007. "Computer usage, destination language proficiency and the earnings of natives and immigrants," Review of Economics of the Household, Springer, vol. 5(2), pages 129-157, June.
  9. John E. DiNardo & Jorn-Steffen Pischke, 1996. "The Returns to Computer Use Revisited: Have Pencils Changed the Wage Structure Too?," NBER Working Papers 5606, National Bureau of Economic Research, Inc.
  10. Oosterbeek, Hessel, 1997. "Returns from computer use: A simple test on the productivity interpretation," Economics Letters, Elsevier, vol. 55(2), pages 273-277, August.
  11. Drolet, Marie & Morissette, Rene, 1998. "Computers, Fax Machines and Wages in Canada: What Really Matters?," Analytical Studies Branch Research Paper Series 1998126e, Statistics Canada, Analytical Studies Branch.
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