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Wages, Employer Size-Wage Premia and Employment Structure: Their Relationship to Advanced-Technology Usage at U.S. Manufacturing Establishments

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  • Timothy Dunne
  • James A Schmitz Jr.

Abstract

We study wages, size-wage premia and the employment structure (measured as the fraction of production workers in an establishment) and their relationship to the extent of advanced-technology usage at U.S, manufacturing plants. We begin by sketching a model of technology adoption based on Lucas (1978) that provides a framework for interpreting the data analysis. We then study a new Census Bureau survey of technology use at manufacturing plants. Workers in establishments that are classified as the most technology intensive earn a premium of 16 percent as compared to those in plants that are the least premium earned by workers in all but the very largest plants. The inclusion of the technology classification variables in standard wage regressions reduced the size-wage premia by as much as 60 percent for some size categories.

Suggested Citation

  • Timothy Dunne & James A Schmitz Jr., 1992. "Wages, Employer Size-Wage Premia and Employment Structure: Their Relationship to Advanced-Technology Usage at U.S. Manufacturing Establishments," Working Papers 92-15, Center for Economic Studies, U.S. Census Bureau.
  • Handle: RePEc:cen:wpaper:92-15
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    File URL: https://www2.census.gov/ces/wp/1992/CES-WP-92-15.pdf
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    References listed on IDEAS

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    1. Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters,in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626 National Bureau of Economic Research, Inc.
    2. Robert E. Lucas Jr., 1978. "On the Size Distribution of Business Firms," Bell Journal of Economics, The RAND Corporation, vol. 9(2), pages 508-523, Autumn.
    3. Kevin T. Reilly, 1995. "Human Capital and Information: The Employer Size-Wage Effect," Journal of Human Resources, University of Wisconsin Press, vol. 30(1), pages 1-18.
    4. Bartel, Ann P & Lichtenberg, Frank R, 1987. "The Comparative Advantage of Educated Workers in Implementing New Technology," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 1-11, February.
    5. Brown, Charles & Medoff, James, 1989. "The Employer Size-Wage Effect," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1027-1059, October.
    6. Ernst R. Berndt & Catherine J. Morrison & Larry S. Rosenblum, 1992. "High-Tech Capital Formation and Labor Composition in U.S. Manufacturing Industries: An Exploratory Analysis," NBER Working Papers 4010, National Bureau of Economic Research, Inc.
    7. Eli Berman & John Bound & Zvi Griliches, 1993. "Changes in the Demand for Skilled Labor within U.S. Manufacturing Industries: Evidence from the Annual Survey of Manufacturing," NBER Working Papers 4255, National Bureau of Economic Research, Inc.
    8. Jacob Mincer, 1991. "Human Capital, Technology, and the Wage Structure: What Do Time Series Show?," NBER Working Papers 3581, National Bureau of Economic Research, Inc.
    9. Welch, F, 1970. "Education in Production," Journal of Political Economy, University of Chicago Press, vol. 78(1), pages 35-59, Jan.-Feb..
    10. Timothy Dunne & Mark J. Roberts, 1990. "Wages and The Rist of Plant Closings," Working Papers 90-6, Center for Economic Studies, U.S. Census Bureau.
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    Cited by:

    1. Jensen, J Bradford & McGuckin, Robert H, 1997. "Firm Performance and Evolution: Empirical Regularities in the US Microdata," Industrial and Corporate Change, Oxford University Press, vol. 6(1), pages 25-47.
    2. Jorge Saba Arbache, 2001. "Trade Liberalisation and Labor Markets in Developing Countries: Theory and Evidence," Studies in Economics 0112, School of Economics, University of Kent.
    3. Edward N. Wolff, "undated". "Skills, Computerization, and Earnings in the Postwar U.S. Economy," Economics Working Paper Archive wp_331, Levy Economics Institute.
    4. Eli Berman & John Bound & Zvi Griliches, 1993. "Changes in the Demand for Skilled Labor within U.S. Manufacturing Industries: Evidence from the Annual Survey of Manufacturing," NBER Working Papers 4255, National Bureau of Economic Research, Inc.
    5. Sabourin, David, 2001. "Penuries de main-d'oeuvre qualifiee et adoption des technologies de pointe," Direction des etudes analytiques : documents de recherche 2001175f, Statistics Canada, Direction des etudes analytiques.
    6. Wolff, Edward N., 2009. "Are computers driving real wages down?," Information Economics and Policy, Elsevier, vol. 21(3), pages 211-228, August.
    7. Robert H Mcguckin, 1993. "The Importance of Establishment Data in Economic Research," Working Papers 93-10, Center for Economic Studies, U.S. Census Bureau.
    8. David N. Beede & Kan H. Young, 1996. "Patterns of Advanced Technology Adoption and Manufacturing Performance: Employment Growth, Labor Productivity, and Employee Earnings," Development and Comp Systems 9604001, EconWPA.
    9. Baldwin, John R. & Sabourin, David, 2001. "Impact de l'adoption des technologies de l'information et des communications de pointe sur la performance des entreprises du secteur de la fabrication au Canada," Direction des etudes analytiques : documents de recherche 2001174f, Statistics Canada, Direction des etudes analytiques.

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    Keywords

    CES; economic; research; micro; data; microdata; chief; economist;

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