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The Link between Technology Use, Human Capital, Productivity and Wages: Firm-level Evidence

  • Julie Turcotte

    ()

  • Lori Whewell Rennison

    ()

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    Arguably the most important development in the Canadian workplace in recent years has been the massive introduction of information and communications technologies (ICT). The impact of this development on a range of variables, including productivity and wages, are manifold, but are still poorly understood. Julie Turcotte and Lori Whewell Rennison of Finance Canada examine the effects of education, training and technology use on productivity and wages at the firm level. They make innovative use of Statistics Canada’s Workplace and Employee Survey, which allows the linking of the characteristics of workers in a firm to firm performance measures. They find that productivity is higher: the more intensively technology is used in the firm; the greater the proportion of university educated workers; the greater the participation of workers in formal training programs; the greater the proportion of workers who receive computer training; and the greater the firm’s export orientation. A key finding with important policy implications is that computer skills training can augment the qualifications of lower-skilled workers and consequently boost firm productivity.

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    Article provided by Centre for the Study of Living Standards in its journal International Productivity Monitor.

    Volume (Year): 9 (2004)
    Issue (Month): (Fall)
    Pages: 25-36

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    Handle: RePEc:sls:ipmsls:v:9:y:2004:3
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    1. Lynch, Lisa M, 1992. "Private-Sector Training and the Earnings of Young Workers," American Economic Review, American Economic Association, vol. 82(1), pages 299-312, March.
    2. Dearden, Lorraine & Reed, Howard & Van Reenen, John, 2000. "Who Gains when Workers Train? Training and Corporate Productivity in a Panel of British Industries," CEPR Discussion Papers 2486, C.E.P.R. Discussion Papers.
    3. Gu, Wulong & Baldwin, John R., 2003. "Participation in Export Markets and Productivity Performance in Canadian Manufacturing," Economic Analysis (EA) Research Paper Series 2003011e, Statistics Canada, Analytical Studies Branch.
    4. John R. Baldwin & David Sabourin, 2002. "Impact of the Adoption of Advanced Information and Communication Technologies on Firm Performance in the Canadian Manufacturing Sector," OECD Science, Technology and Industry Working Papers 2002/1, OECD Publishing.
    5. Sandra E Black & Lisa M Lynch, 2002. "What's Driving the New Economy? The Benefits of Workplace Innovation," Working Papers 02-03, Center for Economic Studies, U.S. Census Bureau.
    6. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863 Elsevier.
    7. Ann P. Bartel & Nachum Sicherman, 1995. "Technological Change and the Skill Acquisition of Young Workers," NBER Working Papers 5107, National Bureau of Economic Research, Inc.
    8. Black, Sandra E & Lynch, Lisa M, 1996. "Human-Capital Investments and Productivity," American Economic Review, American Economic Association, vol. 86(2), pages 263-67, May.
    9. Baldwin, John R. & Peters, Valerie, 2001. "Training as a Human Resource Strategy: The Response to Staff Shortages and Technological Change," Analytical Studies Branch Research Paper Series 2001154e, Statistics Canada, Analytical Studies Branch.
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