The Output Contributions of Computer Equipment and Personnel: A Firm- Level Analysis
This paper examines the output contributions of capital and labor deployed in information systems (IS) at the firm level during the period 1988-91 throughout the business sector, using two different sources of data on these inputs. Our production function estimates suggest that there are substantial excess returns to both IS capital and IS labor, although the size and significance of the excess returns to IS capital is larger. Computer capital and labor jointly contribute, or account for, about 21 percent of output, although only about 10% of both capital and labor income accrue to IS factors. Although IS employees accounted for a very small share of total employment by 1986, IS employment growth is estimated to have made a larger contribution to 1976-86 output growth than non-IS employment, due to the very rapid growth (16% per annum) of IS employment. The estimated marginal rate of substitution (MRS) between IS and non-IS employees, evaluated at the sample mean, is 6: one IS employee can be substituted for six non-IS employees without affecting output.
|Date of creation:||Nov 1993|
|Publication status:||published as Economics of Innovation and New Technology, vol. 3, pp. 201-217, 1995|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
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.:
- Martin Neil Baily & Robert J. Gordon, 1988. "The Productivity Slowdown, Measurement Issues, and the Explosion of Computer Power," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 19(2), pages 347-432.
- Donald Siegel & Zvi Griliches, 1992.
"Purchased Services, Outsourcing, Computers, and Productivity in Manufacturing,"
in: Output Measurement in the Service Sectors, pages 429-460
National Bureau of Economic Research, Inc.
- Donald Siegel & Zvi Griliches, 1991. "Purchased Services, Outsourcing, Computers, and Productivity in Manufacturing," NBER Working Papers 3678, National Bureau of Economic Research, Inc.
- Michael Kremer, 1993. "The O-Ring Theory of Economic Development," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 551-575.
- Berndt, Ernst R. & Morrison, Catherine J. & Rosenblum, Larry S., 1992.
"High-tech capital formation and labor composition in U.S. manufacturing industries : an exploratory analysis,"
3414-92., Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Ernst R. Berndt & Catherine J. Morrison & Larry S. Rosenblum, 1992. "High-Tech Capital Formation and Labor Composition in U.S. Manufacturing Industries: An Exploratory Analysis," NBER Working Papers 4010, National Bureau of Economic Research, Inc.
- Catherine J. Morrison, 2000.
"Assessing The Productivity Of Information Technology Equipment In U.S. Manufacturing Industries,"
The Review of Economics and Statistics,
MIT Press, vol. 79(3), pages 471-481, August.
- Catherine J. Morrison & Ernst R. Berndt, 1991. "Assessing the Productivity of Information Technology Equipment in U.S. Manufacturing Industries," NBER Working Papers 3582, National Bureau of Economic Research, Inc.
- Eli Berman & John Bound & Zvi Griliches, 1993. "Changes in the Demand for Skilled Labor within U.S. Manufacturing Industries: Evidence from the Annual Survey of Manufacturing," NBER Working Papers 4255, National Bureau of Economic Research, Inc.
- Lichtenberg, Frank R & Griliches, Zvi, 1989.
"Errors of Measurement in Output Deflators,"
Journal of Business & Economic Statistics,
American Statistical Association, vol. 7(1), pages 1-9, January.
- Zvi Griliches, 1992. "Output Measurement in the Service Sectors," NBER Books, National Bureau of Economic Research, Inc, number gril92-1.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:4540. 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: ()
If references are entirely missing, you can add them using this form.