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Is Technological Change Really Skills-Biased? Firm-level Evidence of the Complementarities between ICT and Workers’ Education

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Abstract

This paper extends and refnes the concept of ICT-driven skills-biased technological change by disentangling the effects of information technologies (IT) and communication technologies (CT). Guided by the theory that IT and CT differently affect firms' production processes, we investigate the complementarities between these two distinct technologies and workers' levels of education in affecting firms' productivity. Exploiting within-firm variation between 2005-2017, we find that the use of IT-measured as use of business management tools - is particularly beneficial for workers with a tertiary vocational education. In contrast, CT - measured as workers' use of the intranet - is especially complementary to workers with a tertiary academic education. While consistent with the ICT-driven skills-biased technological change hypothesis, our results offer evidence on the necessity for differentiating between the effects of IT and CT on firm productivity when differently educated workers use these technologies.

Suggested Citation

  • Filippo Pusterla & Thomas Bolli, 2019. "Is Technological Change Really Skills-Biased? Firm-level Evidence of the Complementarities between ICT and Workers’ Education," KOF Working papers 19-468, KOF Swiss Economic Institute, ETH Zurich.
    • Handle: RePEc:kof:wpskof:19-468
    DOI: 10.3929/ethz-b-000385031
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    More about this item

    Keywords

    skills-biased technological change; information technologies; communication technologies;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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