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Labor supply and personal computer adoption

  • Mark Doms
  • Ethan Lewis

The positive correlations found between computer use and human capital are often interpreted as evidence that the adoption of computers have raised the relative demand for skilled labor, the widely touted skill-biased technological change hypothesis. However, several models argue the skill- intensity of technology is endogenously determined by the relative supply of skilled labor. The authors use instruments for the supply of human capital coupled with a rich dataset on computer usage by businesses to show that the supply of human capital is an important determinant of the adoption of personal computers. Their results suggest that great caution must be exercised in placing economic interpretations on the correlations often found between technology and human capital.

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Paper provided by Federal Reserve Bank of Philadelphia in its series Working Papers with number 06-10.

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Date of creation: 2006
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Handle: RePEc:fip:fedpwp:06-10
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