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Computer Adoption and Returns in Transition

  • Kuku, Oluyemisi

    ()

    (IFPRI, International Food Policy Research Institute)

  • Orazem, Peter F.

    ()

    (Iowa State University)

  • Singh, Rajesh

    ()

    (Iowa State University)

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.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1360.

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Length: 28 pages
Date of creation: Oct 2004
Date of revision:
Publication status: published in: Economics of Transition, 2007, 15 (1), 33-56
Handle: RePEc:iza:izadps:dp1360
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  1. Chinn,M.D. & Fairlie,R.W., 2004. "The determinants of the global digital divide : a cross-country analysis of computer and internet penetration," Working papers 10, Wisconsin Madison - Social Systems.
  2. Huffman, Wallace E & Mercier, Stephanie, 1991. "Joint Adoption of Microcomputer Technologies: An Analysis of Farmers' Decisions," The Review of Economics and Statistics, MIT Press, vol. 73(3), pages 541-46, August.
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  8. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1998. "Computing Inequality: Have Computers Changed The Labor Market?," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1169-1213, November.
  9. Easterly, William & Fischer, Stanley, 1995. "The Soviet Economic Decline," World Bank Economic Review, World Bank Group, vol. 9(3), pages 341-71, September.
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