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Money for Nothing and Your Chips for Free? The Anatomy of the PC Wage Differential

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  • John P. Haisken-DeNew

    (German Institute for Economic Research)

  • Christoph M. Schmidt

    (University of Heidelberg)

Abstract

The role of the computer at the workplace is examined in determining the wage structure in Germany. It is shown that the wage premium attributed to using a computer at work using cross-sectional results for 1997 is 7%. To control for unmeasured individual effects, we use a random effects and fixed effects estimator. The coefficient for computer usage at the workplace did NOT remain stable and although just barely significant, was reduced to mere 1% with individual fixed effects. We conclude that there are no computer usage wage differentials worth speaking of, once one controls adequately for unobserved individual heterogeneity.

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Bibliographic Info

Paper provided by Econometric Society in its series Econometric Society World Congress 2000 Contributed Papers with number 0859.

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Date of creation: 01 Aug 2000
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Handle: RePEc:ecm:wc2000:0859

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References

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  1. John P. Haisken-DeNew & Christoph M. Schmidt, 2000. "Interindustry and Interregion Differentials: Mechanics and Interpretation," The Review of Economics and Statistics, MIT Press, vol. 79(3), pages 516-521, August.
  2. Dinardo, J.E. & Pischke, J.S., 1996. "The Returns to Computer Use Revisited: Have Pencils Changed the Wage Structure Too?," Working papers 96-12, Massachusetts Institute of Technology (MIT), Department of Economics.
  3. Brian D. Bell, . "Skill-Biased Technical Change and Wages: Evidence from a Longitudinal Data Se," Economics Papers W25., Economics Group, Nuffield College, University of Oxford.
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Cited by:
  1. Muysken, Joan & Schim van der Loeff, S. & Cheshko, Valeria, 2006. "Beyond unobserved heterogeneity in computer wage premiums / Data on computer use in Germany, 1997 – 2001," MERIT Working Papers 006, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  2. Sabrina Wulff Pabilonia & Cindy Zoghi, 2004. "Which Workers Gain from Computer Use?," Working Papers 373, U.S. Bureau of Labor Statistics.
  3. 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.
  4. Martin Falk, 2002. "What Drives the Vacancy Rate for Information Technology Workers?," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 222(4), pages 401-420.
  5. Anger, Silke & Schwarze, Johannes, 2002. "Does future PC use determine our wages today? Evidence from German panel data," SFB 373 Discussion Papers 2002,13, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
  6. Bauer, Thomas K. & Bender, Stefan, 2001. "Flexible Work Systems and the Structure of Wages: Evidence from Matched Employer-Employee Data," IZA Discussion Papers 353, Institute for the Study of Labor (IZA).
  7. Andy Dickerson & Francis Green, 2002. "The Growth and Valuation of Generic Skills," Studies in Economics 0203, Department of Economics, University of Kent.
  8. Spitz, Alexandra & Bertschek, Irene, 2003. "IT, Organizational Change and Wages," ZEW Discussion Papers 03-69, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  9. Borghans L. & Weel B. ter, 2000. "How computerizaton changes the UK Labour Market: The Facts viewed from a new Perspective," ROA Working Paper 010, Maastricht University, Research Centre for Education and the Labour Market (ROA).
  10. Hofer, Helmut & Riedel, Monika, 2003. "Computer Use and the Wage Structure in Austria," Economics Series 147, Institute for Advanced Studies.
  11. John P. Haisken-DeNew & Conchita D'Ambrosia, 2003. "ICT and Socio-Economic Exclusion," RWI Discussion Papers 0003, Rheinisch-Westfälisches Institut für Wirtschaftsforschung.
  12. Fertig, Michael, 2003. "Who's to Blame? The Determinants of German Students' Achievement in the PISA 2000 Study," IZA Discussion Papers 739, Institute for the Study of Labor (IZA).
  13. Lucas Navarro, 2010. "The Impact of Internet Use on Individual Earnings in Latin America," Development Research Working Paper Series 11/2010, Institute for Advanced Development Studies.
  14. Cindy Zoghi & Sabrina Wulff Pabilonia, 2006. "Which Workers Gain Upon Adopting a Computer?," Working Papers 395, U.S. Bureau of Labor Statistics.
  15. Hannes Leo, 2001. "European Skills Shortage in ICT and Policy Responses," WIFO Working Papers 163, WIFO.
  16. Michael Fertig, 2003. "Who’s to Blame? The Determinants of German Students’ Achievement in the PISA 2000 Study," RWI Discussion Papers 0004, Rheinisch-Westfälisches Institut für Wirtschaftsforschung.
  17. Fertig, Michael & Schmidt, Christoph M., 2000. "Discretionary Measures of Active Labor Market Policy: The German Employment Promotion Reform in Perspective," IZA Discussion Papers 182, Institute for the Study of Labor (IZA).

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