The diffusion of personal computers across the United States

For the last fifteen years or so, information technology (IT) has become an ever more important part of the U.S. economy. Looking back over the period, there can be little doubt that the growing use of IT contributed significantly to the economy's performance, especially in the latter half of the 1990s, when output grew rapidly, unemployment declined to 25-year lows, productivity surged, and the inflation rate actually fell. ; A key question about IT's role in this performance is how its use spreads or diffuses throughout the economy. This Economic Letter focuses on a particular part of this question, namely, the diffusion of the personal computer across U.S. businesses from 1990 to 2002. Research by Doms and Lewis (2005) finds that some areas adopted computers much more intensively than others. For instance, out of the 160 metropolitan areas that the authors examine, the San Francisco Bay Area is the most computer-intensive. More generally, they find that metropolitan areas with highly educated workforces are those that are likely to become more computer-intensive, and these are also areas that enjoy faster real wage growth. The authors also find that metropolitan areas with large IT-producing centers tend to adopt computers faster, though the education of the overall workforce seems to be a more important factor.