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In this paper, we test the hypothesis that computer use will lead to productivity gains only if the firm uses an appropriate set of organizational practices. Detailed data on organizational practices and workers. compensation are obtained through a Canadian longitudinal linked employer-employee database called the Workplace and Employee Survey (WES). Linked data allow us to take into account both worker and firm unobserved heterogeneity through the estimation of a linear mixed model of wage determination. Our results suggest a small but positive computer-wage premium whose size is related to a set of organizational practices.

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Paper provided by HEC Montréal, Institut d'économie appliquée in its series Cahiers de recherche with number 04-06.

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Length: 41 pages
Date of creation: Aug 2004
Date of revision:
Handle: RePEc:iea:carech:0406
Contact details of provider: Postal: Institut d'économie appliquée HEC Montréal 3000, Chemin de la Côte-Sainte-Catherine Montréal, Québec H3T 2A7
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  1. Timothy F. Bresnahan & Manuel Trajtenberg, 1992. "General Purpose Technologies "Engines of Growth?"," NBER Working Papers 4148, National Bureau of Economic Research, Inc.
  2. Brynjolfsson, Erik. & Hitt, Lorin M., 1994. "Information technology as a factor of production : the role of differences among firms," Working papers 3715-94. CCSTR ; #173., Massachusetts Institute of Technology (MIT), Sloan School of Management.
  3. Abowd, John M. & Kramarz, Francis, 1999. "Econometric analyses of linked employer-employee data," Labour Economics, Elsevier, vol. 6(1), pages 53-74, March.
  4. Lisa M Lynch & Sandra E Black, 2002. "How to Compete: The Impact of Workplace Practices and Information Technology on Productivity," Working Papers 02-04, Center for Economic Studies, U.S. Census Bureau.
  5. Brynjolfsson, Erik & Hitt, Lorin M., 2004. "Computing Productivity: Firm-Level Evidence," Working papers 4210-01, Massachusetts Institute of Technology (MIT), Sloan School of Management.
  6. David Card & John E. DiNardo, 2002. "Skill Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles," NBER Working Papers 8769, National Bureau of Economic Research, Inc.
  7. Silke Anger & Johannes Schwarze, 2003. "Does Future PC Use Determine Our Wages Today? - Evidence from German Panel Data," LABOUR, CEIS, vol. 17(3), pages 337-360, 09.
  8. Entorf, Horst & Gollac, Michel & Kramarz, Francis, 1997. "New Technologies, Wages and Worker Selection," CEPR Discussion Papers 1761, C.E.P.R. Discussion Papers.
  9. Ann P. Bartel & Nachum Sicherman, 1997. "Technological Change and Wages: An Inter-Industry Analysis," NBER Working Papers 5941, National Bureau of Economic Research, Inc.
  10. John M. Abowd & Francis Kramarz & David N. Margolis, 1994. "High Wage Workers and High Wage Firms," NBER Working Papers 4917, National Bureau of Economic Research, Inc.
  11. repec:tpr:qjecon:v:117:y:2002:i:1:p:339-376 is not listed on IDEAS
  12. repec:tpr:qjecon:v:113:y:1998:i:4:p:1169-1213 is not listed on IDEAS
  13. David Autor & Lawrence Katz & Alan Krueger, 1997. "Computing Inequality: Have Computers Changed the Labor Market?," Working Papers 756, Princeton University, Department of Economics, Industrial Relations Section..
  14. Timothy F. Bresnahan & Erik Brynjolfsson & Lorin M. Hitt, 1999. "Information Technology, Workplace Organization and the Demand for Skilled Labor: Firm-Level Evidence," NBER Working Papers 7136, National Bureau of Economic Research, Inc.
  15. repec:tpr:qjecon:v:109:y:1994:i:2:p:367-97 is not listed on IDEAS
  16. Irene Bertschek & Ulrich Kaiser, 2004. "Productivity Effects of Organizational Change: Microeconometric Evidence," Management Science, INFORMS, vol. 50(3), pages 394-404, March.
  17. Gordon, Robert J, 2004. "Five Puzzles in the Behaviour of Productivity, Investment and Innovation," CEPR Discussion Papers 4414, C.E.P.R. Discussion Papers.
  18. Makepeace, Gerry & Peter Dolton, 2003. "Computer use and earnings in Britain," Royal Economic Society Annual Conference 2003 146, Royal Economic Society.
  19. repec:tpr:qjecon:v:108:y:1993:i:1:p:33-60 is not listed on IDEAS
  20. Alan B. Krueger, 1991. "How Computers Have Changed the Wage Structure: Evidence From Microdata, 1984-1989," NBER Working Papers 3858, National Bureau of Economic Research, Inc.
  21. repec:tpr:qjecon:v:112:y:1997:i:1:p:253-90 is not listed on IDEAS
  22. Entorf, Horst & Kramarz, Francis, 1997. "Does unmeasured ability explain the higher wages of new technology workers?," European Economic Review, Elsevier, vol. 41(8), pages 1489-1509, August.
  23. Abowd, John M. & Kramarz, Francis, 1999. "The analysis of labor markets using matched employer-employee data," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 40, pages 2629-2710 Elsevier.
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