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The Returns to Pencil Use Revisited

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  • Alexandra Spitz-Oener

Abstract

Many researchers believe that the observed positive association between computer use and wages simply reflects unobserved heterogeneity: like pencils and other “white-collar†tools, computers are assigned to employees who possess productive attributes that would attract higher wages in any event. This study evaluates that claim by identifying the mechanisms through which computers changed the wage structure in West Germany in the late 1990s. The author finds that the spread of computers—but not of pencils—shifted the task composition of occupations toward analytical and interactive tasks that are complementary to computers' capabilities, and away from routine cognitive and manual tasks for which computers tend to substitute. Employees possessing computer-complementary skills enjoyed wage increases because computers both raised the demand for their skills and increased their marginal product.

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  • Alexandra Spitz-Oener, 2008. "The Returns to Pencil Use Revisited," ILR Review, Cornell University, ILR School, vol. 61(4), pages 502-517, July.
  • Handle: RePEc:sae:ilrrev:v:61:y:2008:i:4:p:502-517
    DOI: 10.1177/001979390806100404
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    Cited by:

    1. Black, Sandra E. & Muller, Chandra & Spitz-Oener, Alexandra & He, Ziwei & Hung, Koit & Warren, John Robert, 2021. "The importance of STEM: High school knowledge, skills and occupations in an era of growing inequality," Research Policy, Elsevier, vol. 50(7).
    2. Schäffler, Johannes & Moritz, Michael, 2018. "German FDI in the Czech Republic - Employment effects in the home country," IAB-Discussion Paper 201806, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. Peter Dolton & Panu Pelkonen, 2008. "The Wage Effects of Computer Use: Evidence from WERS 2004," British Journal of Industrial Relations, London School of Economics, vol. 46(4), pages 587-630, December.
    4. Daniela Rohrbach-Schmidt & Michael Tiemann, 2013. "Changes in workplace tasks in Germany—evaluating skill and task measures [Wandel der Tätigkeiten am Arbeitsplatz in Deutschland – Analysen von Skill und Task-Maßen]," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 46(3), pages 215-237, September.
    5. Falck, Oliver & Heimisch-Roecker, Alexandra & Wiederhold, Simon, 2021. "Returns to ICT skills," Research Policy, Elsevier, vol. 50(7).
    6. Elisabeth Bublitz, 2018. "Matching skills of individuals and firms along the career path," Oxford Economic Papers, Oxford University Press, vol. 70(2), pages 509-537.
    7. Mathias Silva, 2016. "TIC y Desigualdad Salarial en Uruguay," Documentos de Investigacion Estudiantil (students working papers) 16-06, Instituto de Economia - IECON.
    8. Görlitz, Katja & Tamm, Marcus, 2011. "Revisiting the Complementarity between Education and Training – The Role of Personality, Working Tasks and Firm Effects," Ruhr Economic Papers 307, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    9. Schäffler, Johannes, 2016. "German Direct Investments in the Czech Republic – Employment Effects on German Multinational Enterprises," VfS Annual Conference 2016 (Augsburg): Demographic Change 145526, Verein für Socialpolitik / German Economic Association.
    10. Ingwersen, Kai & Thomsen, Stephan L., 2020. "An Empirical Assessment of Workload and Migrants' Health in Germany," IZA Discussion Papers 13962, Institute of Labor Economics (IZA).
    11. Katja Görlitz & Marcus Tamm, 2011. "Revisiting the Complementarity between Education and Training – The Role of Personality, Working Tasks and Firm Effects," Ruhr Economic Papers 0307, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    12. Pfeiffer, Sabine, 2018. "The "future of employment" on the shop floor: Why production jobs are less susceptible to computerization than assumed," International Journal for Research in Vocational Education and Training (IJRVET), European Research Network in Vocational Education and Training (VETNET), European Educational Research Association, vol. 5(3), pages 208-225.
    13. Regula Geel & Uschi Backes-Gellner, 2009. "Occupational Mobility Within and Between Skill Clusters: An Empirical Analysis Based on the Skill-Weights Approach," Economics of Education Working Paper Series 0047, University of Zurich, Department of Business Administration (IBW), revised Mar 2011.
    14. Pfeiffer, Sabine, 2015. "Auswirkungen von Industrie 4.0 auf Aus- und Weiterbildung (ITA-manu:script 15-03)," ITA manu:scripts 15_03, Institute of Technology Assessment (ITA).
    15. Thor Berger & Carl Benedikt Frey, 2016. "Structural Transformation in the OECD: Digitalisation, Deindustrialisation and the Future of Work," OECD Social, Employment and Migration Working Papers 193, OECD Publishing.
    16. Thomsen, Stephan L, 2018. "Die Rolle der Computerisierung und Digitalisierung für Beschäftigung und Einkommen," Hannover Economic Papers (HEP) dp-645, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    17. Golo Henseke, 2019. "Against the Grain? Assessing Graduate Labour Market Trends in Germany Through a Task-Based Indicator of Graduate Jobs," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 141(2), pages 809-840, January.
    18. Pikos, Anna Katharina & Thomsen, Stephan L., 2016. "Rising Work Complexity but Decreasing Returns," IZA Discussion Papers 9878, Institute of Labor Economics (IZA).
    19. Hunt, Jennifer & Nunn, Ryan, 2022. "Has U.S. employment really polarized? A critical reappraisal," Labour Economics, Elsevier, vol. 75(C).
    20. Reimann, Mareike & Abendroth, Anja-Kristin & Diewald, Martin, 2020. "How digitalized is work in large German workplaces, and how is digitalized work perceived by workers? : A new employer-employee survey instrument," IAB-Forschungsbericht 202008, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
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    22. Pikos, Anna Katharina, 2017. "The task composition and work-related mental health - a descriptive study," Hannover Economic Papers (HEP) dp-610, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    23. Pikos, Anna Katharina, 2017. "The causal effect of multitasking on work-related mental health - the more you do, the worse you feel," Hannover Economic Papers (HEP) dp-609, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    24. Görlitz, Katja & Tamm, Marcus, 2016. "The returns to voucher-financed training on wages, employment and job tasks," Economics of Education Review, Elsevier, vol. 52(C), pages 51-62.
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    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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