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Computers, Work Organization, and Wage Outcomes

  • Peter Cappelli
  • William H. Carter
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    We examine two factors frequently thought to be changing the U.S. workplace, high performance work practices and computer use, and their relationships with pay using a national probability sample of U.S. establishments. The analysis controls for both organizational and individual characteristics and finds that higher wages are associated with several practices, particularly computer use and teamwork, for front-line workers who are the targets of most high performance work practices. Not surprisingly, relationships are not as strong for other occupations and are very weak in the non-manufacturing sector. Computer use is a particularly important influence on the wages of managers and supervisors, although it is computer use by their subordinates that is the important factor. The most unusual result may be the consistently negative and significant relationship between wages and job rotation where additional analyses suggest that job rotation in isolation from other high performance practices may proxy lower skill jobs. Some of the positive relationships vanish when various controls for human capital are added, suggesting that those wage premiums are a return to human capital and may be driven by greater skill requirements.

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    File URL: http://www.nber.org/papers/w7987.pdf
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    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7987.

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    Date of creation: Oct 2000
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    Handle: RePEc:nbr:nberwo:7987
    Note: LS PR
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    1. Rosemary Batt, 1999. "Work Organization, Technology, and Performance in Customer Service and Sales," ILR Review, Cornell University, ILR School, vol. 52(4), pages 539-564, July.
    2. Peter Cappelli & Nikolai Rogovsky, 1998. "Employee Involvement and Organizational Citizenship: Implications for Labor Law Reform and “Lean Production#x201D;," ILR Review, Cornell University, ILR School, vol. 51(4), pages 633-653, July.
    3. Sandra E. Black & Lisa M. Lynch, 2003. "What's driving the new economy?: the benefits of workplace innovation," Working Paper Series 2003-23, Federal Reserve Bank of San Francisco.
    4. David Neumark & Peter Cappelli, 1999. "Do "High Performance" Work Practices Improve Establishment-Level Outcomes?," NBER Working Papers 7374, National Bureau of Economic Research, Inc.
    5. Alan B. Krueger, 1991. "How Computers Have Changed the Wage Structure: Evidence From Microdata, 1984-1989," NBER Working Papers 3858, National Bureau of Economic Research, Inc.
    6. John Paul Macduffie, 1995. "Human Resource Bundles and Manufacturing Performance: Organizational Logic and Flexible Production Systems in the World Auto Industry," ILR Review, Cornell University, ILR School, vol. 48(2), pages 197-221, January.
    7. Jacob Mincer, 1991. "Human Capital, Technology, and the Wage Structure: What Do Time Series Show?," NBER Working Papers 3581, National Bureau of Economic Research, Inc.
    8. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1997. "Computing Inequality: Have Computers Changed the Labor Market?," NBER Working Papers 5956, National Bureau of Economic Research, Inc.
    9. Peter Cappelli & David Neumark, 2001. "Do "high-performance" work practices improve establishment-level outcomes?," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 54(4), pages 737-775, July.
    10. Mark Doms & Timothy Dunne & Kenneth R. Troske, 1997. "Workers, Wages, and Technology," The Quarterly Journal of Economics, Oxford University Press, vol. 112(1), pages 253-290.
    11. Timothy F. Bresnahan & Erik Brynjolfsson & Lorin M. Hitt, 1999. "Information Technology, Workplace Organization and the Demand for Skilled Labor: Firm-Level Evidence," NBER Working Papers 7136, National Bureau of Economic Research, Inc.
    12. Levy, Frank & Murnane, Richard J, 1992. "U.S. Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1333-81, September.
    13. Ann P. Bartel & Nachum Sicherman, 1995. "Technological Change and the Skill Acquisition of Young Workers," NBER Working Papers 5107, National Bureau of Economic Research, Inc.
    14. Ichniowski, Casey & Shaw, Kathryn & Prennushi, Giovanna, 1997. "The Effects of Human Resource Management Practices on Productivity: A Study of Steel Finishing Lines," American Economic Review, American Economic Association, vol. 87(3), pages 291-313, June.
    15. Harry C. Katz & Thomas A. Kochan & Kenneth R. Gobeille, 1983. "Industrial Relations Performance, Economic Performance, and QWL Programs: An Interplant Analysis," ILR Review, Cornell University, ILR School, vol. 37(1), pages 3-17, October.
    16. 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.
    17. Claudia Goldin & Lawrence F. Katz, 1995. "The Decline of Non-Competing Groups: Changes in the Premium to Education, 1890 to 1940," NBER Working Papers 5202, National Bureau of Economic Research, Inc.
    18. Eli Berman & John Bound & Zvi Griliches, 1994. "Changes in the Demand for Skilled Labor within U. S. Manufacturing: Evidence from the Annual Survey of Manufactures," The Quarterly Journal of Economics, Oxford University Press, vol. 109(2), pages 367-397.
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