Returns to ICT Skills Use and Labour Market Institutions

This paper analyses the moderating role of institutional factors on returns to ICT skill usage among different groups of workers in eight European labour markets. Using PIAAC data, it leverages the ‘institutional salience’ of contractual status to analyse the returns on the use of ICT-related skills in the workplace, allowing for heterogeneous wage effects at the micro level among workers holding permanent and temporary contracts. It extends the analysis by considering how gaps in ICT wage premiums mirror the compositional differences in national-specific trade union densities among contractual groups. Wage premiums associated with ICT usage are not defined univocally by task content or demand-supply dynamics for specific occupations. Net of occupation and industry, the results show different returns between labour market segments and according to national-specific trade union densities of temporary and permanent workers, providing a test of how the consequence of technological change are shaped by institutional and regulative cleavages.