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Information and Communication Technologies and Skill Upgrading: The Role of Internal vs. External Labour Markets

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Author Info

  • Behaghel, Luc

    ()
    (Paris School of Economics)

  • Caroli, Eve

    ()
    (Université Paris-Dauphine)

  • Walkowiak, Emmanuelle

    ()
    ((CEE) Centre D'Ètudes de L'Emploi)

Abstract

Following the adoption of information and communication technologies (ICT), firms are likely to face increasing skill requirements. They may react either by training or hiring the new skills, or by a combination of both. We first show that ICT are indeed skill biased and we then assess the relative importance of external and internal labour market strategies. We show that skill upgrading following ICT adoption takes place mostly through internal labour markets adjustments. The introduction of ICT is associated with an upward shift in firms’ occupational structure, of which one third is due to hiring and firing workers from and to the external labour market, whereas two-thirds are due to promotions. Moreover, we find no compelling evidence of external labour market strategies based on "excess turnover". In contrast, French firms heavily rely on training in order to upgrade the skill level of their workforce, even if this varies across industries.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5494.

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Length: 37 pages
Date of creation: Feb 2011
Date of revision:
Publication status: published in: Oxford Economic Papers, 2012, 64 (3), 490-517.
Handle: RePEc:iza:izadps:dp5494

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Related research

Keywords: skill bias; technical change; internal labour markets; labour turnover; training;

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  1. Alexandra Spitz-Oener, 2006. "Technical Change, Job Tasks, and Rising Educational Demands: Looking outside the Wage Structure," Journal of Labor Economics, University of Chicago Press, vol. 24(2), pages 235-270, April.
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Cited by:
  1. Behaghel, Luc & Lorenceau, Adrien & Quantin, Simon, 2013. "Replacing Churches and Mason Lodges? Tax Exemptions and Rural Development," IZA Discussion Papers 7808, Institute for the Study of Labor (IZA).
  2. repec:hal:wpaper:halshs-00646595 is not listed on IDEAS
  3. Behaghel, Luc & Moschion, Julie, 2012. "Skilled Labor Supply, IT-Based Technical Change and Job Instability," IZA Discussion Papers 6839, Institute for the Study of Labor (IZA).

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