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Information and Communication Technologies and Skill Upgrading: the Role of Internal vs External Labour Markets

Listed author(s):
  • Luc Behaghel

    (PSE - Paris-Jourdan Sciences Economiques - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics)

  • Eve Caroli

    ()

    (PSE - Paris-Jourdan Sciences Economiques - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics, LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine)

  • Emmanuelle Walkowiak

    (ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12, CEE - Centre d'études de l'emploi - M.E.N.E.S.R. - Ministère de l'Éducation nationale, de l’Enseignement supérieur et de la Recherche - Ministère du Travail, de l'Emploi et de la Santé)

ollowing the adoption of information and communication technologies (ICT), firms may react to increasing skill requirements either by training or hiring the new skills, or a combination of the two.Using matched datasets with about 1,000 French plants, we assess the relative importance of these external and internal labour market strategies. We show that skill upgrading following technological and organisational changes takes place mostly through internal labour markets adjustments. Consistently with the results in the literature, we find that the intensive use of ICT is associated with an upward shift in the occupational structure within firms. We show that about one third of the upgrading of the occupational structure is due to hiring and firing workers from and to the external labour market, whereas two-thirds are due to promotions. Moreover, we find no compelling evidence of external labour market strategies based on "excess turnover". In contrast, French firms heavily rely on training in order to upgrade the skill level of their workforce. When looking at potential heterogeneity across firms in skill upgrading strategies, we find that all firms rely much more on promotions than on external movements in order to shift their occupational structure upward. In contrast, different training patterns are found across sectors : the use of ICT is strongly correlated with training for all occupational groups in manufacturing sectors, whereas this is not the case in services. This difference is robust to controlling for other sources of heterogeneity and may be explained by the fact that labour turnover is much higher in services than in manufacturing.

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Paper provided by HAL in its series PSE - Labex "OSE-Ouvrir la Science Economique" with number halshs-00754524.

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Date of creation: Sep 2012
Publication status: Published in Oxford Economic Papers, Oxford University Press (OUP), 2012, pp.490-517. <10.1093/oep/gpr045>
Handle: RePEc:hal:pseose:halshs-00754524
DOI: 10.1093/oep/gpr045
Note: View the original document on HAL open archive server: https://hal-pjse.archives-ouvertes.fr/halshs-00754524
Contact details of provider: Web page: https://hal.archives-ouvertes.fr/

References listed on IDEAS
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  1. Bauer, Thomas & Bender, Stefan, 2002. "Technological Change, Organizational Change, and Job Turnover," CEPR Discussion Papers 3534, C.E.P.R. Discussion Papers.
  2. Philippe Zamora, 2006. "Changements organisationnels, technologiques et recours à la formation dans les entreprises industrielles," Revue économique, Presses de Sciences-Po, vol. 57(6), pages 1235-1257.
  3. Emmanuelle Walkowiak, 2006. "Renouvellement de la main-d'œuvre et modernisation des entreprises," Revue économique, Presses de Sciences-Po, vol. 57(6), pages 1205-1233.
  4. John M. Abowd & Patrick Corbel & Francis Kramarz, 1999. "The Entry And Exit Of Workers And The Growth Of Employment: An Analysis Of French Establishments," The Review of Economics and Statistics, MIT Press, vol. 81(2), pages 170-187, May.
  5. Andrea Bassanini & Alison Booth & Giorgio Brunello & Maria De Paola & Edwin Leuven, 2006. "Workplace training in Europe," Post-Print halshs-00120601, HAL.
  6. Eve Caroli & John Van Reenen, 2001. "Skill-Biased Organizational Change? Evidence from A Panel of British and French Establishments," The Quarterly Journal of Economics, Oxford University Press, vol. 116(4), pages 1449-1492.
  7. BEHAGHEL Luc & GREENAN Nathalie, 2007. "Training and age-biased technical change," Research Unit Working Papers 0705, Laboratoire d'Economie Appliquee, INRA.
  8. Sandra E. Black & Lisa M. Lynch, 2003. "What's driving the new economy?: the benefits of workplace innovation," Working Paper Series 2003-23, Federal Reserve Bank of San Francisco.
  9. Alexandra Spitz-Oener, 2006. "Technical Change, Job Tasks, and Rising Educational Demands: Looking outside the Wage Structure," Journal of Labor Economics, University of Chicago Press, vol. 24(2), pages 235-270, April.
  10. Luc Behaghel & Fabien Postel-Vinay, 2003. "Insécurité de l'emploi : le rôle protecteur de l'ancienneté a-t-il baissé en France ? Suivi d'un commentaire de Fabien Postel-Vinay," Économie et Statistique, Programme National Persée, vol. 366(1), pages 3-29.
  11. Philippe Azkenazy & Eva Moreno, 2004. "The impact of technological and organizational changes on labor flows. Evidence on French establishments," DELTA Working Papers 2004-25, DELTA (Ecole normale supérieure).
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