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Computers, Skills and Wages

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

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Abstract

Computer use is mainly associated with skilled, high-wage workers. Furthermore, the introduction of computers leads to upgrading of skill requirements. This suggests that the computer requires certain skills to take full advantage of its possibilities. 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 and new empirical evidence from Britain showing how computers change the labor market. The model shows that wages are an important determinant of computer use and that neither computer skills nor complementary skills seem to be needed to explain skill upgrading. The empirical results are consistent with the model because they indicate that computer use is explained by wages rather than by skills and that wages are not related to computer skills.

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Paper provided by Maastricht : MERIT, Maastricht Economic Research Institute on Innovation and Technology in its series Research Memoranda with number 019.

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Date of creation: 2001
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Handle: RePEc:dgr:umamer:2001019

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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.:
  1. Bruce Weinberg, 1998. "Computer Use and the Demand for Women Workers," Working Papers 98-06, Ohio State University, Department of Economics. [Downloadable!]
  2. Joshua D. Angrist, 1991. "Instrumental Variables Estimation of Average Treatment Effects in Econometrics and Epidemiology," NBER Technical Working Papers 0115, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  3. repec:fth:prinin:377 is not listed on IDEAS
  4. Timothy F. Bresnahan & Erik Brynjolfsson & Lorin M. Hitt, 1999. "Information Technology, Workplace Organization and the Demand for Skilled Labor: Firm-Level Evidence," NBER Working Papers 7136, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  5. 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.
  6. Allen, Steven G, 2001. "Technology and the Wage Structure," Journal of Labor Economics, University of Chicago Press, vol. 19(2), pages 440-83, April. [Downloadable!] (restricted)
    Other versions:
  7. Chiswick, Barry R & Miller, Paul W, 1995. "The Endogeneity between Language and Earnings: International Analyses," Journal of Labor Economics, University of Chicago Press, vol. 13(2), pages 246-88, April. [Downloadable!] (restricted)
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  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. [Downloadable!] (restricted)
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  10. Dunne, Timothy & Schmitz, James A, Jr, 1995. "Wages, Employment Structure and Employer Size-Wage Premia: Their Relationship to Advanced-Technology Usage at US Manufacturing Establishments," Economica, London School of Economics and Political Science, vol. 62(245), pages 89-107, February. [Downloadable!] (restricted)
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  13. 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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  14. 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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  16. Chris Freeman & Luc Soete, 1997. "The Economics of Industrial Innovation, 3rd Edition," MIT Press Books, The MIT Press, edition 3, volume 1, number 0262061953.
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  24. Eli Berman & Kevin Lang & Erez Siniver, 2000. "Language-Skill Complementarity: Returns to Immigrant Language Acquisition," NBER Working Papers 7737, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  25. Borghans,L. & Weel,B.,ter, 2001. "What happens when agent T gets a computer?," Research Memoranda 004, Maastricht : ROA, Research Centre for Education and the Labour Market. [Downloadable!]
    Other versions:
  26. 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)
    Other versions:
  27. Miller, Paul & Mulvey, Charles, 1997. "Computer Skills and Wages," Australian Economic Papers, Blackwell Publishing, vol. 36(68), pages 106-13, June.
  28. Dale W. Jorgenson, 2001. "Information Technology and the U. S. Economy," Harvard Institute of Economic Research Working Papers 1911, Harvard - Institute of Economic Research. [Downloadable!]
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  30. 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. 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:
  2. Borghans,Lex & Weel,Bas,ter, 2005. "The Division of Labour, Worker Organisation, and Technological Change," Research Memoranda 005, Maastricht : ROA, Research Centre for Education and the Labour Market. [Downloadable!]
    Other versions:
  3. Borghans, Lex & ter Weel, Bas, 2003. "Are Computer Skills the New Basic Skills? The Returns to Computer, Writing and Math Skills in Britain," IZA Discussion Papers 751, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  4. Hofer, Helmut & Riedel, Monika, 2003. "Computer Use and the Wage Structure in Austria," Economics Series 147, Institute for Advanced Studies. [Downloadable!]
  5. Borghans,Lex & Weel,Bas,ter, 2002. "Do Older Workers Have More Trouble Using a Computer Than Younger Workers?," Research Memoranda 003, Maastricht : ROA, Research Centre for Education and the Labour Market. [Downloadable!]
  6. Marc van der Steeg, 2005. "Why should governments intervene in education, and how effective is education policy," CPB Memoranda 122, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
  7. 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:
  8. Sanders Jos & Grip Andries de, 2003. "Training, Task Flexibility and Low-Skilled Workers' Employability," Research Memoranda 007, Maastricht : ROA, Research Centre for Education and the Labour Market. [Downloadable!]
    Other versions:
  9. Casey Ichniowski & Kathryn Shaw, 2003. "Beyond Incentive Pay: Insiders' Estimates of the Value of Complementary Human Resource Management Practices," Journal of Economic Perspectives, American Economic Association, vol. 17(1), pages 155-180, Winter. [Downloadable!] (restricted)
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