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Computer Adoption and Returns in Transition

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Author Info
Kuku, Yemisi (Iowa State University)
Orazem, Peter F. () (Iowa State University, University of Kansas and IZA Bonn)
Singh, Rajesh (Iowa State University)

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Abstract

Data from nine transition economies in Central and Eastern Europe are used to examine the role of computer adoption for returns to education. As in western economies, computers are adopted most heavily by young, educated, English-speaking workers with the best access to local telecommunications infrastructures. These same attributes have been associated with rising relative earnings in transition economies. Controlling for likely simultaneity between computer use and labor market earnings, we find much larger returns to individuals from computer adoption than have been found in established market economies. The large returns are explainable by the high cost of adoption and the scarcity of computer skills. As of 2000, only 14% had ever tried a computer. Consequently, despite much larger individual returns, computers are associated with an 8% increase in average incomes in the nine countries.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1360.

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Length: 28 pages
Date of creation: Oct 2004
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Handle: RePEc:iza:izadps:dp1360

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Related research
Keywords: computer adoption; transition economies; earnings; returns; telecommunications;

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Find related papers by JEL classification:
O - Economic Development, Technological Change, and Growth
P2 - Economic Systems - - Socialist Systems and Transition Economies
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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. Menzie Chinn & Robert Fairlie, 2004. "The Determinants of the Global Digital Divide: A Cross-Country Analysis of Computer and Internet Penetration," Santa Cruz Center for International Economics, Working Paper Series 1022, Center for International Economics, UC Santa Cruz. [Downloadable!]
    Other versions:
  2. Huffman, Wallace E & Mercier, Stephanie, 1991. "Joint Adoption of Microcomputer Technologies: An Analysis of Farmers' Decisions," The Review of Economics and Statistics, MIT Press, vol. 73(3), pages 541-46, August. [Downloadable!] (restricted)
  3. 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. [Downloadable!] (restricted)
    Other versions:
  4. 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)
  5. 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.
  6. repec:att:wimass:1920410 is not listed on IDEAS
  7. Liu, Jin-Tan & Tsou, Meng-Wen & Hammitt, James K., 2004. "Computer use and wages: evidence from Taiwan," Economics Letters, Elsevier, vol. 82(1), pages 43-51, January. [Downloadable!] (restricted)
  8. Orazem, Peter F & Vodopivec, Milan, 1995. "Winners and Losers in Transition: Returns to Education, Experience, and Gender in Slovenia," World Bank Economic Review, Oxford University Press, vol. 9(2), pages 201-30, May.
    Other versions:
  9. Timothy Dunne & Lucia Foster & John Haltiwanger & Kenneth R. Troske, 2004. "Wage and Productivity Dispersion in United States Manufacturing: The Role of Computer Investment," Journal of Labor Economics, University of Chicago Press, vol. 22(2), pages 397-430, April. [Downloadable!]
  10. Oosterbeek, Hessel, 1997. "Returns from computer use: A simple test on the productivity interpretation," Economics Letters, Elsevier, vol. 55(2), pages 273-277, August. [Downloadable!] (restricted)
  11. Harry A. Krashinsky, 2004. "Do Marital Status and Computer Usage Really Change the Wage Structure?," Journal of Human Resources, University of Wisconsin Press, vol. 39(3). [Downloadable!] (restricted)
  12. Easterly, William & Fischer, Stanley, 1995. "The Soviet Economic Decline," World Bank Economic Review, Oxford University Press, vol. 9(3), pages 341-71, September.
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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. Hiroshi Ono & Madeline Zavodny, 2007. "Immigrants, English Ability and the Digital Divide," IZA Discussion Papers 3124, Institute for the Study of Labor (IZA). [Downloadable!]
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