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What happens when agent T gets a computer?: The labor market impact of cost efficient computer adoption

  • Borghans, Lex
  • ter Weel, Bas

This paper offers a model to explain how computer technology has changed the labor market. It demonstrates that wage differentials between computer users and non-users are consistent with the fact that computers are first introduced in high-wage jobs because of cost efficiency. Furthermore, skill upgrading occurs because of a reemphasis on non-routine tasks after computer adoption. The model also reveals that neither differences in computer skills nor complementary skills are needed to explain wage differentials between computer users and non-users, skill upgrading, and the changing organization and intensity of work. Finally, the predicted effects on the wage structure following the diffusion of computers are consistent with the empirical evidence.

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Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 54 (2004)
Issue (Month): 2 (June)
Pages: 137-151

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Handle: RePEc:eee:jeborg:v:54:y:2004:i:2:p:137-151
Contact details of provider: Web page: http://www.elsevier.com/locate/jebo

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