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The Impact Of Information Technology On Labor Productivity Growth: Evidence From Five OECD Countries, 1970-1990

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  • Hyunbae Chun

    (Sogang University)

Abstract

This paper examines the impact of information technology (IT) on labor productivity growth using industry-level data for five OECD countries (the United States, Canada, Japan, France, and the United Kingdom), from 1970 to 1990. Empirical findings show that IT investment has a positive effect on labor productivity growth, accounting for about 15 percent of this growth. The benefit of IT investment was on average lower than its cost over the 1970-1990 period, which implies that new IT investment had not been efficiently used in the early period of IT adoption. The benefit per dollar cost was almost two times greater in the 1980s than in the 1970s, which is mainly due to a rapid fall in IT prices.

Suggested Citation

  • Hyunbae Chun, 2007. "The Impact Of Information Technology On Labor Productivity Growth: Evidence From Five OECD Countries, 1970-1990," Korean Economic Review, Korean Economic Association, vol. 23, pages 5-32.
    • Handle: RePEc:kea:keappr:ker-200706-23-1-01
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    More about this item

    Keywords

    Information Technology; Labor Productivity Growth; IT Productivity Paradox;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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