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What happens when agent T gets a computer?

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Author Info
Borghans,Lex
Weel,Bas,ter (MERIT)

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Abstract

During the last decade a great many authors have shown that computers have a large impact on skill demand, production processes, and the organization and intensity of work. Analyses have indicated that the rates of change of these variables have been the largest in the more computer-intensive sectors. Empirical findings, however, suggest that the effects of computers on the labor market are complicated and difficult to trace. This paper offers a simple model to explain how computers have changed the labor market. The model demonstrates that wage differentials between computer users and other workers are consistent with the observation that computers are first introduced in high-wage jobs because of cost efficiency. It also shows that neither computer skills nor complementary skills are needed to explain skill upgrading, changes in product characteristics, and the organization and intensity of work. Finally, it is shown that these findings shed a different light on the way computers have changed the labor market and on the changes to be expected following the further diffusion of computers.

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Paper provided by Maastricht : MERIT, Maastricht Economic Research Institute on Innovation and Technology in its series Research Memoranda with number 017.

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Date of creation: 2001
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Handle: RePEc:dgr:umamer:2001017

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Keywords: economics of technology

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    Other versions:
  4. repec:fth:prinin:377 is not listed on IDEAS
  5. Lindbeck, Assar & Snower, Dennis J, 2000. "Multitask Learning and the Reorganization of Work: From Tayloristic to Holistic Organization," Journal of Labor Economics, University of Chicago Press, vol. 18(3), pages 353-76, July. [Downloadable!] (restricted)
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  6. Bruce A. Weinberg, 2000. "Computer use and the demand for female workers," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 53(2), pages 290-308, January.
  7. 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. [Downloadable!] (restricted)
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  8. Daron Acemoglu, 2002. "Technical Change, Inequality, and the Labor Market," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 7-72, March. [Downloadable!] (restricted)
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  9. Timothy F. Bresnahan & Erik Brynjolfsson & Lorin M. Hitt, 2002. "Information Technology, Workplace Organization, And The Demand For Skilled Labor: Firm-Level Evidence," The Quarterly Journal of Economics, MIT Press, vol. 117(1), pages 339-376, February. [Downloadable!] (restricted)
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  10. Borghans, Lex & ter Weel, Bas, 2003. "Do We Need Computer Skills to Use a Computer? Evidence from Britain," IZA Discussion Papers 685, Institute for the Study of Labor (IZA). [Downloadable!]
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  11. Daron Acemoglu, 1999. "Changes in Unemployment and Wage Inequality: An Alternative Theory and Some Evidence," American Economic Review, American Economic Association, vol. 89(5), pages 1259-1278, December. [Downloadable!] (restricted)
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  12. Groot, Loek F. M. & De Grip, Andries, 1991. "Technological change and skill formation in the bank sector," Economics of Education Review, Elsevier, vol. 10(1), pages 57-71, March. [Downloadable!] (restricted)
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    Other versions:
  14. Berndt, Ernst R. & Morrison, Catherine J., 1992. "High-tech capital formation and economic performance in U.S. manufacturing industries : an exploratory analysis," Working papers 3419-92., Massachusetts Institute of Technology (MIT), Sloan School of Management. [Downloadable!]
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  15. Timothy Dunne & John Haltiwanger & Lucia Foster, 2000. "Wage and Productivity Dispersion in U.S. Manufacturing: The Role of Computer Investment," NBER Working Papers 7465, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  16. Entorf, Horst & Kramarz, Francis, 1997. "Does unmeasured ability explain the higher wages of new technology workers?," European Economic Review, Elsevier, vol. 41(8), pages 1489-1509, August. [Downloadable!] (restricted)
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  18. David H. Autor & Frank Levy & Richard Murnane, 2000. "Upstairs, Downstairs: Computer-Skill Complementarity and Computer-Labor Substitution on Two Floors of a Large Bank," NBER Working Papers 7890, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  20. Michael Kremer & Eric Maskin, 1996. "Wage Inequality and Segregation by Skill," NBER Working Papers 5718, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  21. Doms, Mark & Dunne, Timothy & Troske, Kenneth R, 1997. "Workers, Wages, and Technology," The Quarterly Journal of Economics, MIT Press, vol. 112(1), pages 253-90, February.
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  24. Bresnahan, Timothy F, 1999. "Computerisation and Wage Dispersion: An Analytical Reinterpretation," Economic Journal, Royal Economic Society, vol. 109(456), pages F390-415, June. [Downloadable!] (restricted)
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  25. Eve Caroli & John Van Reenen, 2001. "Skill-Biased Organizational Change? Evidence From A Panel Of British And French Establishments," The Quarterly Journal of Economics, MIT Press, vol. 116(4), pages 1449-1492, November. [Downloadable!] (restricted)
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  26. Borghans L. & Weel B. ter, 2000. "How computerizaton changes the UK Labour Market: The Facts viewed from a new Perspective," Working Papers 010, Maastricht : ROA, Researchcentrum voor Onderwijs en Arbeidsmarkt. [Downloadable!]
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  27. F Green & S McIntosh, 2000. "Working on the Chain Gang? An Examination of Rising Effort Levels in Europe in the 1990s," CEP Discussion Papers 0465, Centre for Economic Performance, LSE. [Downloadable!]
  28. Eli Berman & John Bound & Stephen Machin, 1998. "Implications Of Skill-Biased Technological Change: International Evidence," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1245-1279, November. [Downloadable!] (restricted)
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  29. Miller, Paul & Mulvey, Charles, 1997. "Computer Skills and Wages," Australian Economic Papers, Blackwell Publishing, vol. 36(68), pages 106-13, June.
  30. Acemoglu, Daron, 2002. "Directed Technical Change," Review of Economic Studies, Blackwell Publishing, vol. 69(4), pages 781-809, October.
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  31. David H. Autor & Frank Levy & Richard J. Murnane, 2001. "The Skill Content of Recent Technological Change: An Empirical Exploration," NBER Working Papers 8337, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  32. Francis Green, 1998. "The Value of Skills," Studies in Economics 9819, Department of Economics, University of Kent. [Downloadable!]
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Schleife, Katrin, 2004. "Computer Use and the Employment Status of Older Workers : An Analysis Based on Individual Data," ZEW Discussion Papers 04-62, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  2. Borghans,Lex & Weel,Bas,ter, 2001. "Computers, Skills and Wages," Research Memoranda 019, Maastricht : MERIT, Maastricht Economic Research Institute on Innovation and Technology. [Downloadable!]
    Other versions:
  3. Borghans,Lex & Weel,Bas,ter, 2002. "Do Older Workers Have More Trouble Using a Computer Than Younger Workers?," Research Memoranda 003, Maastricht : ROA, Researchcentrum voor Onderwijs en Arbeidsmarkt. [Downloadable!]
  4. David H. Autor & Frank Levy & Richard J. Murnane, 2001. "The Skill Content of Recent Technological Change: An Empirical Exploration," NBER Working Papers 8337, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  5. Borghans, Lex & ter Weel, Bas, 2003. "What Happens When Agent T Gets a Computer? The Labor Market Impact of Cost Efficient Computer Adoption," IZA Discussion Papers 792, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  6. Sakellariou, Chris N. & Patrinos, Harry A., 2003. "Technology, computers, and wages : evidence from a developing economy," Policy Research Working Paper Series 3008, The World Bank. [Downloadable!]
    Other versions:
  7. Katrin Schleife, 2004. "Computer Use and the Employment Status of Older Workers - An Analysis Based on Individual Data," Darmstadt Discussion Papers in Economics 145, Institut für Volkswirtschaftslehre (Department of Economics), Technische Universität Darmstadt (Darmstadt University of Technology). [Downloadable!]
  8. Borghans L. & Weel B. ter, 2000. "How computerizaton changes the UK Labour Market: The Facts viewed from a new Perspective," Working Papers 010, Maastricht : ROA, Researchcentrum voor Onderwijs en Arbeidsmarkt. [Downloadable!]
    Other versions:
  9. Borghans, Lex & ter Weel, Bas, 2004. "The Diffusion of Computers and the Distribution of Wages," IZA Discussion Papers 1107, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  10. Borghans,Lex & Weel ,Bas ,ter, 2005. "The Division of Labour, Worker Organisation, and Technological Change," Research Memoranda 022, Maastricht : MERIT, Maastricht Economic Research Institute on Innovation and Technology. [Downloadable!]
    Other versions:
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