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Organizational change, new information and communication technologies and the demand for labor in services

  • Falk, Martin

Between 1993 and 1995, the majority of German firms in services introduced new organizational practices (OC), in particular total quality management systems, certified ISO 9000, lean administration, flatter hierarchies, delegation of authority and ICT-enabled organizational changes). This paper analyzes the impact of organizational change as well as the impact of the introduction of information and communication technology (ICT) on actual labor demand as well as on employment expectations. The focus of attention is also directed to potential endogeneity of OC using treatment effect models as well as multivariate probit models. The empirical results suggest that OC has a positive effect on actual employment growth given output and factor price changes. Furthermore, we find that organizational change has a positive impact on expected employment for all skill groups except for unskilled labor. New ICT and the share of training expenditures are primary forces behind OC. Finally, employment effects are robust to endogeneity of organizational change.

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Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 01-25.

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Date of creation: 2001
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Handle: RePEc:zbw:zewdip:5380
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  1. Timothy F. Bresnahan, 1997. "Computerization and Wage Dispersion: An Analytical Reinterpretation," Working Papers 97031, Stanford University, Department of Economics.
  2. Breslaw, Jon A. & McIntosh, James, 1998. "Simulated latent variable estimation of models with ordered categorical data," Journal of Econometrics, Elsevier, vol. 87(1), pages 25-47, August.
  3. Eve Caroli & John Van Reenen, 2001. "Skill-Biased Organizational Change? Evidence From A Panel Of British And French Establishments," The Quarterly Journal of Economics, MIT Press, vol. 116(4), pages 1449-1492, November.
  4. Timothy F. Bresnahan & Erik Brynjolfsson & Lorin M. Hitt, 2002. "Information Technology, Workplace Organization, And The Demand For Skilled Labor: Firm-Level Evidence," The Quarterly Journal of Economics, MIT Press, vol. 117(1), pages 339-376, February.
  5. Lisa M. Lynch & Sandra E. Black, 1995. "Beyond the Incidence of Training: Evidence from a National Employers Survey," NBER Working Papers 5231, National Bureau of Economic Research, Inc.
  6. Caroli, Eve & Greenan, Nathalie & Guellec, Dominique, 2001. "Organizational Change and Skill Accumulation," Industrial and Corporate Change, Oxford University Press, vol. 10(2), pages 481-506, June.
  7. Ulrich Kaiser, 2000. "New Technologies And The Demand For Heterogeneous Labor: Firm-Level Evidence For The German Business-Related Service Sector," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 9(5), pages 465-486.
  8. Doms, Mark & Dunne, Timothy & Troske, Kenneth R, 1997. "Workers, Wages, and Technology," The Quarterly Journal of Economics, MIT Press, vol. 112(1), pages 253-90, February.
  9. Bartel, Ann P & Lichtenberg, Frank R, 1987. "The Comparative Advantage of Educated Workers in Implementing New Technology," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 1-11, February.
  10. Paul Osterman, 2000. "Work reorganization in an era of restructuring: Trends in diffusion and effects on employee welfare," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 53(2), pages 179-196, January.
  11. Casey Ichniowski & Kathryn Shaw & Giovanna Prennushi, 1995. "The Effects of Human Resource Management Practices on Productivity," NBER Working Papers 5333, National Bureau of Economic Research, Inc.
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