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Understanding the Technology of Computer Technology Diffusion: Explaining Computer Adoption Patterns and Implications for the Wage Structure

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Author Info
Borghans Lex
Weel Bas ter (ROA rm)

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Abstract

We review the empirical literature about the implications of the computerization ofthe labor market to see whether it can explain observed computer adoptionpatterns and (long-term) changes in the wage structure. Evidence from empiricalmicro studies turns out to be inconsistent with macro studies that are based onCES production functions. We propose a micro foundation for the CESproduction function that allows for changes in the underlying structure. We adaptthe macro model by incorporating computer skills, complementary skills and fixedcosts for computer technology usage suggested by the micro literature. It turns outthat fixed costs for computer technology usage explain different patterns ofcomputer adoption and diffusion between several types of workers and countries; italso provides very plausible patterns of the timing of wage inequality anddevelopments over time.

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Paper provided by Maastricht : ROA, Research Centre for Education and the Labour Market in its series Research Memoranda with number 009.

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Date of creation: 2008
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Handle: RePEc:dgr:umaror:2008009

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Keywords: education; training and the labour market;

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    Other versions:
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  18. Katz, Lawrence F. & Autor, David H., 1999. "Changes in the wage structure and earnings inequality," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 26, pages 1463-1555 Elsevier. [Downloadable!] (restricted)
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  22. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2008. "Trends in U.S. Wage Inequality: Revising the Revisionists," The Review of Economics and Statistics, MIT Press, vol. 90(2), pages 300-323, 06. [Downloadable!] (restricted)
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  24. 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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  25. Dupuy, Arnaud, 2008. "A Microfoundation for Production Functions: Assignment of Heterogenous Workers to Heterogenous Jobs," IZA Discussion Papers 3312, Institute for the Study of Labor (IZA). [Downloadable!]
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  30. Borghans, Lex & ter Weel, Bas, 2004. "What happens when agent T gets a computer?: The labor market impact of cost efficient computer adoption," Journal of Economic Behavior & Organization, Elsevier, vol. 54(2), pages 137-151, June. [Downloadable!] (restricted)
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  31. Borghans,Lex & Weel,Bas,ter, 2003. "The Diffusion of Computers and the Distribution of Wages," Research Memoranda 003, Maastricht : ROA, Research Centre for Education and the Labour Market. [Downloadable!]
    Other versions:
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