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Information Technology, Workplace Organization, And The Demand For Skilled Labor: Firm-Level Evidence

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  • Timothy F. Bresnahan
  • Erik Brynjolfsson
  • Lorin M. Hitt

Abstract

We investigate the hypothesis that the combination of three related innovations-1) information technology (IT), 2) complementary workplace reorganization, and 3) new products and services-constitute a significant skill-biased technical change affecting labor demand in the United States. Using detailed firm-level data, we find evidence of complementarities among all three of these innovations in factor demand and productivity regressions. In addition, firms that adopt these innovations tend to use more skilled labor. The effects of IT on labor demand are greater when IT is combined with the particular organizational investments we identify, highlighting the importance of IT-enabled organizational change. © 2001 the President and Fellows of Harvard College and the Massachusetts Institute of Technology

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Bibliographic Info

Article provided by MIT Press in its journal The Quarterly Journal of Economics.

Volume (Year): 117 (2002)
Issue (Month): 1 (February)
Pages: 339-376

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Handle: RePEc:tpr:qjecon:v:117:y:2002:i:1:p:339-376

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Web page: http://mitpress.mit.edu/journals/

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  1. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1998. "Computing Inequality: Have Computers Changed The Labor Market?," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1169-1213, November.
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  7. Orlikowski, Wanda J. (Wanda Janina)., 1992. "Learning from notes : organizational issues in groupware implementation," Working papers #134. Working paper (Sloa, Massachusetts Institute of Technology (MIT), Sloan School of Management.
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  11. Brynjolfsson, Erik. & Hitt, Lorin M., 1994. "Information technology as a factor of production : the role of differences among firms," Working papers 3715-94. CCSTR ; #173., Massachusetts Institute of Technology (MIT), Sloan School of Management.
  12. Barras, Richard, 1990. "Interactive innovation in financial and business services: The vanguard of the service revolution," Research Policy, Elsevier, vol. 19(3), pages 215-237, June.
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  23. Paul Osterman, 1994. "How common is workplace transformation and who adopts it?," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 47(2), pages 173-188, January.
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  25. Wanda Orlikowski, 1992. "Learning from NOTES: Organizational Issues in Groupware Implementation," Working Paper Series 134, MIT Center for Coordination Science.
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