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Returns to ICT skills

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  • Falck, Oliver
  • Heimisch-Roecker, Alexandra
  • Wiederhold, Simon

Abstract

How important is mastering information and communication technology (ICT) on modern labor markets? We answer this question with unique data on ICT skills tested in 19 countries. Our two instrumental-variable models exploit technologically induced variation in broadband Internet availability that gives rise to variation in ICT skills across countries and German municipalities. We find statistically and economically significant returns to ICT skills. For instance, an increase in ICT skills similar to the gap between an average-performing and a top-performing country raises earnings by about 8 percent. One mechanism driving positive returns is selection into occupations with high abstract task content.

Suggested Citation

  • Falck, Oliver & Heimisch-Roecker, Alexandra & Wiederhold, Simon, 2021. "Returns to ICT skills," Research Policy, Elsevier, vol. 50(7).
  • Handle: RePEc:eee:respol:v:50:y:2021:i:7:s0048733320301426
    DOI: 10.1016/j.respol.2020.104064
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    More about this item

    Keywords

    ICT skills; Broadband; Earnings; International comparisons;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law

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