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Computer Use and Productivity Growth in US Federal Government Agencies, 1987–92

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  • William Lehr
  • Frank R. Lichtenberg

Abstract

We examine the impact of information technology (IT) on productivity in the public sector econometrically, using data from the BLS Federal Productivity Measurement Program and from Computer Intelligence Infocorp, and by interviewing some government officials. We estimate a production function for government services that includes IT capital as an input, and find a strong positive relationship across federal agencies between productivity growth and computer‐intensity growth during the period 1987–92, controlling for growth in compensation and other outlays per employee, and in the number of employees. Our estimates are consistent with the hypothesis that there are ‘excess returns’ to IT capital.

Suggested Citation

  • William Lehr & Frank R. Lichtenberg, 1998. "Computer Use and Productivity Growth in US Federal Government Agencies, 1987–92," Journal of Industrial Economics, Wiley Blackwell, vol. 46(2), pages 257-279, June.
    • Handle: RePEc:bla:jindec:v:46:y:1998:i:2:p:257-279
    DOI: 10.1111/1467-6451.00071
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    Cited by:

    1. Radhakrishnan, Abirami & Zu, Xingxing & Grover, Varun, 2008. "A process-oriented perspective on differential business value creation by information technology: An empirical investigation," Omega, Elsevier, vol. 36(6), pages 1105-1125, December.
    2. Mirko Draca & Raffaella Sadun & John Van Reenen, 2006. "Productivity and ICT: A Review of the Evidence," CEP Discussion Papers dp0749, Centre for Economic Performance, LSE.
    3. Alexandru-Ioan Stan, 2018. "Computational speed and high-frequency trading profitability: an ecological perspective," Electronic Markets, Springer;IIM University of St. Gallen, vol. 28(3), pages 381-395, August.
    4. ten Raa, Thijs & Wolff, Edward N., 2000. "Engines of growth in the US economy," Structural Change and Economic Dynamics, Elsevier, vol. 11(4), pages 473-489, December.
    5. Y C Ng & M K Chang, 2003. "Impact of computerization on firm performance: a case of Shanghai manufacturing enterprises," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 54(10), pages 1029-1037, October.
    6. Weaver, Robert D. & Curtiss, Jarmila & Brümmer, Bernhard, 2005. "Technical Efficiency Effects of Technological Change: Another Perspective on GM Crops," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24528, European Association of Agricultural Economists.
    7. Stefan Schweikl & Robert Obermaier, 2020. "Lessons from three decades of IT productivity research: towards a better understanding of IT-induced productivity effects," Management Review Quarterly, Springer, vol. 70(4), pages 461-507, November.
    8. Franz Haider & Robert Kunst & Franz Wirl, 2021. "Total factor productivity, its components and drivers," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 48(2), pages 283-327, May.
    9. Indjikian, Rouben & Siegel, Donald S., 2005. "The Impact of Investment in IT on Economic Performance: Implications for Developing Countries," World Development, Elsevier, vol. 33(5), pages 681-700, May.
    10. Pierre Biscourp & Bruno Crépon & Thomas Heckel & Nicolas Riedinger, 2003. "How do Firms Respond to Cheaper Computers ? Microeconometric Evidence for France Based on a Production Function," Working Papers 2003-05, Center for Research in Economics and Statistics.
    11. Liu, Ting-Kun & Chen, Jong-Rong & Huang, Cliff J. & Yang, Chih-Hai, 2014. "Revisiting the productivity paradox: A semiparametric smooth coefficient approach based on evidence from Taiwan," Technological Forecasting and Social Change, Elsevier, vol. 81(C), pages 300-308.

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