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The Returns to Computer Use Revisited, Again

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Using North American data, we revisit the question first broached by Krueger (1993) and re-examined by DiNardo and Pischke (1997) of whether there exists a real wage differential associated with computer use. Employing a mixed effects model to correct for both worker and workplace unobserved heterogeneity using matched employer-employee panel data, we find that computer users enjoy an almost 4 per cent wage premium over non-users. Failure to correct for the worker selection effect leads to a more than twofold overestimate of this premium, as does failure to correct for workplace unobserved heterogeneity.

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  • Benoit Dostie & Rajshri Jayaramanz & Mathieu Trépanier, 2006. "The Returns to Computer Use Revisited, Again," Cahiers de recherche 06-03, HEC Montréal, Institut d'économie appliquée.
  • Handle: RePEc:iea:carech:0603
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    Keywords

    Wage determination; computers; mixed models; linked employer-employee data;

    JEL classification:

    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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