Money for Nothing and Your Chips for Free? The Anatomy of the PC Wage Differential
In this paper, the role of the computer at the workplace will be examined in determining the wage structure in Germany. Following Krueger (1993) and using the German Socio-Economic Panel (GSOEP), cross-sectional wage regression results from 1997 and panel results from 1984-1997 are presented. It is shown that the wage premium attributed to using a computer at work using cross-sectional results for 1997 is around 7%. Further it is shown that computer usage is very heterogeneous depending on which industry one works in. In cross-section, hypothesis tests show that several industries and almost all firm size categories exhibit very different wage differentials depending on computer usage at the workplace. As DiNardo and Pischke (1997) stress the need for panel data to control for unmeasured individual effects, we use GSOEP 1984-1997 ’panel data, where a random effects and fixed effects estimator were run in the wage estimation. We confirm the results that Entorf and Kramarz (1997) had for France, that in Germany the coefficient for computer usage at the workplace did not remain stable and although just barely significant, was reduced to mere 1% with individual fixed effects. We conclude that there are no computer usage wage differentials worth speaking of, once one controls adequately for unobserved individual heterogeneity.
|Date of creation:||Dec 1999|
|Date of revision:|
|Contact details of provider:|| Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany|
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
|Order Information:|| Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- John P. Haisken-DeNew & Christoph M. Schmidt, 2000.
"Interindustry and Interregion Differentials: Mechanics and Interpretation,"
The Review of Economics and Statistics,
MIT Press, vol. 79(3), pages 516-521, August.
- John P. Haisken-DeNew & Christoph M. Schmidt, . "Inter-Industry and Inter-Region Differentials: Mechanics and Interpretation," Working Papers 9504, SELAPO Center for Human Resources.
- John E. DiNardo & Jorn-Steffen Pischke, 1996.
"The Returns to Computer Use Revisited: Have Pencils Changed the Wage Structure Too?,"
NBER Working Papers
5606, National Bureau of Economic Research, Inc.
- John E. DiNardo & Jörn-Steffen Pischke, 1997. "The Returns to Computer Use Revisited: Have Pencils Changed the Wage Structure Too?," The Quarterly Journal of Economics, Oxford University Press, vol. 112(1), pages 291-303.
- Dinardo, J.E. & Pischke, J.S., 1996. "The Returns to Computer Use Revisited: Have Pencils Changed the Wage Structure Too?," Working papers 96-12, Massachusetts Institute of Technology (MIT), Department of Economics.
- Brian D. Bell, . "Skill-Biased Technical Change and Wages: Evidence from a Longitudinal Data Se," Economics Papers W25., Economics Group, Nuffield College, University of Oxford.
When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp86. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak)
If references are entirely missing, you can add them using this form.