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What happens when agent T gets a computer?

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  • Borghans, Lex
  • Weel, Bas ter

    (MERIT)

Abstract

During the last decade a great many authors have shown that computers have a large impact on skill demand, production processes, and the organization and intensity of work. Analyses have indicated that the rates of change of these variables have been the largest in the more computer-intensive sectors. Empirical findings, however, suggest that the effects of computers on the labor market are complicated and difficult to trace. This paper offers a simple model to explain how computers have changed the labor market. The model demonstrates that wage differentials between computer users and other workers are consistent with the observation that computers are first introduced in high-wage jobs because of cost efficiency. It also shows that neither computer skills nor complementary skills are needed to explain skill upgrading, changes in product characteristics, and the organization and intensity of work. Finally, it is shown that these findings shed a different light on the way computers have changed the labor market and on the changes to be expected following the further diffusion of computers.

Suggested Citation

  • Borghans, Lex & Weel, Bas ter, 2001. "What happens when agent T gets a computer?," Research Memorandum 017, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
  • Handle: RePEc:unm:umamer:2001017
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    File URL: https://www.merit.unu.edu/publications/rmpdf/2001/rm2001-017.pdf
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    References listed on IDEAS

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    Cited by:

    1. Borghans, Lex & ter Weel, Bas, 2004. "What happens when agent T gets a computer?: The labor market impact of cost efficient computer adoption," Journal of Economic Behavior & Organization, Elsevier, vol. 54(2), pages 137-151, June.
    2. Lex Borghans & Bas ter Weel, 2011. "Computers, skills and wages," Applied Economics, Taylor & Francis Journals, vol. 43(29), pages 4607-4622.
    3. Borghans, L. & ter Weel, B.J., 2002. "Do older workers have more trouble using a computer than younger workers?," ROA Research Memorandum 1E, Maastricht University, Research Centre for Education and the Labour Market (ROA).

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