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Computer Adoption and Returns in Transition

Author

Listed:
  • Kuku, Oluyemisi

    (IFPRI, International Food Policy Research Institute)

  • Orazem, Peter F.

    (Iowa State University)

  • Singh, Rajesh

    (Iowa State University)

Abstract

Data from nine transition economies in Central and Eastern Europe are used to examine the role of computer adoption for returns to education. As in western economies, computers are adopted most heavily by young, educated, English-speaking workers with the best access to local telecommunications infrastructures. These same attributes have been associated with rising relative earnings in transition economies. Controlling for likely simultaneity between computer use and labor market earnings, we find much larger returns to individuals from computer adoption than have been found in established market economies. The large returns are explainable by the high cost of adoption and the scarcity of computer skills. As of 2000, only 14% had ever tried a computer. Consequently, despite much larger individual returns, computers are associated with an 8% increase in average incomes in the nine countries.

Suggested Citation

  • Kuku, Oluyemisi & Orazem, Peter F. & Singh, Rajesh, 2004. "Computer Adoption and Returns in Transition," IZA Discussion Papers 1360, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp1360
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    2. Ono, Hiroshi & Zavodny, Madeline, 2007. "Immigrants, English Ability and the Digital Divide," IZA Discussion Papers 3124, IZA Network @ LISER.
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    4. Vinod Mishra & Russell Smyth, 2014. "Technological Change and Wages in China: Evidence from Matched Employer–Employee Data," Review of Development Economics, Wiley Blackwell, vol. 18(1), pages 123-138, February.
    5. Wojciech Hardy & Roma Keister & Piotr Lewandowski, 2018. "Educational upgrading, structural change and the task composition of jobs in Europe," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 26(2), pages 201-231, April.

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    Keywords

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    JEL classification:

    • O - Economic Development, Innovation, Technological Change, and Growth
    • P2 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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