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Paying to Program? Engineering Brand and High-Tech Wages

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  • Prasanna Tambe
  • Xuan Ye
  • Peter Cappelli

Abstract

We test the hypothesis that IT workers accept a compensating differential to work with emerging IT systems, and that employers that invest in these systems can, in turn, capture greater value from the wages they pay. We show that much of the utility IT workers derive from these systems is from skills acquired on the job. This is principally true for younger workers at employers where skill development is encouraged, and the effects are stronger in thicker markets where workers with newer skills have more outside options. An analysis of the text in online employer reviews supports the notion that IT workers value access to interesting IT systems above most other employer attributes. These findings are important because first, they provide evidence of how worker preferences can influence corporate IT investment decisions; second, because they shed light on factors influencing IT skill development; and third, because they point to a potentially important explanation for returns from IT investments.

Suggested Citation

  • Prasanna Tambe & Xuan Ye & Peter Cappelli, 2019. "Paying to Program? Engineering Brand and High-Tech Wages," NBER Working Papers 25552, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:25552
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    More about this item

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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