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Does Future PC Use Determine Our Wages Today? Evidence from German Panel Data

Author

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  • Anger, Silke

    (Institute for Employment Research (IAB), Nuremberg)

  • Schwarze, Johannes

    (University of Bamberg)

Abstract

Using 1985–1999 data from the German Socio-Economic Panel Study (GSOEP) to analyze wages confirms the hypothesis that existing computer wage premiums are determined by individual ability or other unobserved individual characteristics rather than by productivity effects. While a rather large personal computer (PC) wage premium was found in the crosssectional regressions even after the inclusion of standard controls, the conventional longitudinal regression analysis revealed substantially lower or statistically insignificant coefficients, as have other studies. In addition, a new method of testing the two competing explanations for computer wage differentials against each other was found: future PC variables were employed in the wage regressions in order to obtain a further control for worker heterogeneity. The finding that future PC variables have a statistically significant effect on current wages leads one to conclude that computer wage differentials can be attributed to worker heterogeneity rather than to computer-induced productivity.

Suggested Citation

  • Anger, Silke & Schwarze, Johannes, 2002. "Does Future PC Use Determine Our Wages Today? Evidence from German Panel Data," IZA Discussion Papers 429, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp429
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    References listed on IDEAS

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    Cited by:

    1. Benoit Dostie & Mathieu Trépanier, 2004. "Return to Computer Use and Organizational Practices of the firm," Cahiers de recherche 04-06, HEC Montréal, Institut d'économie appliquée.
    2. Schmitt, John & Wadsworth, Jonathan, 2006. "Is there an impact of household computer ownership on children's educational attainment in Britain?," Economics of Education Review, Elsevier, vol. 25(6), pages 659-673, December.
    3. Heineck, Guido & Schwarze, Johannes, 2003. "Substance Use and Earnings: The Case of Smokers in Germany," IZA Discussion Papers 743, Institute of Labor Economics (IZA).

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    Keywords

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    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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