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Computers, Fax Machines and Wages in Canada: What Really Matters?

Author

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  • Drolet, Marie
  • Morissette, Rene

Abstract

Controlling for observable worker attributes, we find that computer use is associated with a wage premium of at most 14%. Following Dinardo and Pischke (1997), we examine the wage premium associated with other tools used on the job. While these authors find a significant wage premium for the use of pencils or for sitting down while working, we find a substantial and robust wage premium for the use of a fax machine. Using a variety of reasonable specifications of wage equations including both a computer use indicator and a fax use indicator, we consistently find a stronger effect for fax machines than for computers. Along with Dinardo and Pischke (1997), we argue that workers who use computers earn more than other employees not because of their computing skills per se, but rather because they have more other unobserved skills - innate or learned through school - than other employees.

Suggested Citation

  • Drolet, Marie & Morissette, Rene, 1998. "Computers, Fax Machines and Wages in Canada: What Really Matters?," Analytical Studies Branch Research Paper Series 1998126e, Statistics Canada, Analytical Studies Branch.
  • Handle: RePEc:stc:stcp3e:1998126e
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    References listed on IDEAS

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    1. Nathalie Greenana & Jacques Mairesse, 2000. "Computers And Productivity In France: Some Evidence," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 9(3), pages 275-315.
    2. Allen, Steven G, 2001. "Technology and the Wage Structure," Journal of Labor Economics, University of Chicago Press, vol. 19(2), pages 440-483, April.
    3. Bound, John & Krueger, Alan B, 1991. "The Extent of Measurement Error in Longitudinal Earnings Data: Do Two Wrongs Make a Right?," Journal of Labor Economics, University of Chicago Press, vol. 9(1), pages 1-24, January.
    4. Dunne, Timothy & Schmitz, James A, Jr, 1995. "Wages, Employment Structure and Employer Size-Wage Premia: Their Relationship to Advanced-Technology Usage at US Manufacturing Establishments," Economica, London School of Economics and Political Science, vol. 62(245), pages 89-107, February.
    5. Ann P. Bartel & Nachum Sicherman, 1999. "Technological Change and Wages: An Interindustry Analysis," Journal of Political Economy, University of Chicago Press, vol. 107(2), pages 285-325, April.
    6. 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.
    7. Richard B. Freeman & Karen Needels, 1993. "Skill Differentials in Canada in an Era of Rising Labor Market Inequality," NBER Chapters,in: Small Differences That Matter: Labor Markets and Income Maintenance in Canada and the United States, pages 45-68 National Bureau of Economic Research, Inc.
    8. Brian D. Bell, "undated". "Skill-Biased Technical Change and Wages: Evidence from a Longitudinal Data Se," Economics Papers W25., Economics Group, Nuffield College, University of Oxford.
    9. Morissette, Rene, 1995. "Why Has Inequality in Weekly Earnings Increased in Canada?," Analytical Studies Branch Research Paper Series 1995080e, Statistics Canada, Analytical Studies Branch.
    10. Baldwin, John R. & Gray, Tara & Johnson, Joanne, 1996. "Technology-induced Wage Premia in Canadian Manufacturing Plants During the 1980s," Analytical Studies Branch Research Paper Series 1996092e, Statistics Canada, Analytical Studies Branch.
    11. 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 1333-1381, September.
    12. 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.
    13. Beach, C.M. & Slotsve, G.A., 1994. "Polarization of Earnings in the Canadian Labour Market: A Non-Microdata Approach," Working Papers 17, John Deutsch Institute for the Study of Economic Policy.
    14. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1998. "Computing Inequality: Have Computers Changed the Labor Market?," The Quarterly Journal of Economics, Oxford University Press, vol. 113(4), pages 1169-1213.
    15. repec:fth:prinin:377 is not listed on IDEAS
    16. Entorf, Horst & Kramarz, Francis, 1997. "Does unmeasured ability explain the higher wages of new technology workers?," European Economic Review, Elsevier, vol. 41(8), pages 1489-1509, August.
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    Cited by:

    1. Oosterbeek, Hessel & Ponce, Juan, 2011. "The impact of computer use on earnings in a developing country: Evidence from Ecuador," Labour Economics, Elsevier, vol. 18(4), pages 434-440, August.
    2. Chris N. Sakellariou & Harry A. Patrinos, 2004. "Technology, computers and wages: evidence from a developing economy," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 47(3-4), pages 543-543.

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