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Information and communication technologies and skill upgrading: the role of internal vs external labour markets

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  • Luc Behaghel
  • Eve Caroli
  • Emmanuelle Walkowiak

Abstract

Following the adoption of information and communication technologies (ICT), firms are likely to face increasing skill requirements. They may react either by training or hiring the new skills, or by a combination of both. We first show that ICT are indeed skill biased and we then assess the relative importance of external and internal labour market strategies. We show that skill upgrading following ICT adoption takes place mostly through internal labour markets adjustments. The introduction of ICT is associated with an upward shift in firms' occupational structure, of which one third is due to hiring and firing workers from and to the external labour market, whereas two-thirds are due to promotions. Moreover, we find no compelling evidence of external labour market strategies based on excess turnover. In contrast, French firms heavily rely on training in order to upgrade the skill level of their workforce, even if this varies across industries. Copyright 2012 Oxford University Press 2011 All rights reserved, Oxford University Press.

Suggested Citation

  • Luc Behaghel & Eve Caroli & Emmanuelle Walkowiak, 2012. "Information and communication technologies and skill upgrading: the role of internal vs external labour markets," Oxford Economic Papers, Oxford University Press, vol. 64(3), pages 490-517, July.
  • Handle: RePEc:oup:oxecpp:v:64:y:2012:i:3:p:490-517
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    File URL: http://hdl.handle.net/10.1093/oep/gpr045
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    References listed on IDEAS

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    1. Alexandra Spitz-Oener, 2006. "Technical Change, Job Tasks, and Rising Educational Demands: Looking outside the Wage Structure," Journal of Labor Economics, University of Chicago Press, vol. 24(2), pages 235-270, April.
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    Cited by:

    1. Behaghel, Luc & Lorenceau, Adrien & Quantin, Simon, 2015. "Replacing churches and mason lodges? Tax exemptions and rural development," Journal of Public Economics, Elsevier, vol. 125(C), pages 1-15.
    2. Fibla Gasparín, Ma. Teresa, 2010. "Staffing strategies in SME's: determinants of external recruitment and internal promotion," Working Papers 2072/179603, Universitat Rovira i Virgili, Department of Economics.
    3. Luc Behaghel & Julie Moschion, 2011. "Skilled labor supply, IT-based technical change and job instability," PSE Working Papers halshs-00646595, HAL.
    4. Garcia-Canal, Esteban & Rialp-Criado, Alex & Rialp-Criado, Josep, 2013. "Speed of ICT integration strategies in absorptions: Insights from a qualitative study," European Management Journal, Elsevier, vol. 31(3), pages 295-307.
    5. Luc Behaghel & Julie Moschion, 2011. "Skilled labor supply, IT-based technical change and job instability," Working Papers halshs-00646595, HAL.

    More about this item

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

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