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

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  • Falk, Martin

Abstract

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.

Suggested Citation

  • Falk, Martin, 2001. "Organizational change, new information and communication technologies and the demand for labor in services," ZEW Discussion Papers 01-25, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  • Handle: RePEc:zbw:zewdip:5380
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    References listed on IDEAS

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    1. 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.
    2. 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.
    3. 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, Oxford University Press, vol. 117(1), pages 339-376.
    4. 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.
    5. 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.
    6. Bresnahan, Timothy F, 1999. "Computerisation and Wage Dispersion: An Analytical Reinterpretation," Economic Journal, Royal Economic Society, vol. 109(456), pages 390-415, June.
    7. 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.
    8. 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.
    9. Eve Caroli & John Van Reenen, 2001. "Skill-Biased Organizational Change? Evidence from A Panel of British and French Establishments," The Quarterly Journal of Economics, Oxford University Press, vol. 116(4), pages 1449-1492.
    10. 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.
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    Citations

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    Cited by:

    1. Bernhard Dachs & Martin Hud & Christian Köhler & Bettina Peters, 2016. "Employment Effects of Innovations over the Business Cycle: Firm-Level Evidence from European Countries," CREA Discussion Paper Series 16-20, Center for Research in Economic Analysis, University of Luxembourg.
    2. repec:iab:iabzaf:v:41:i:2/3:p:259-285 is not listed on IDEAS
    3. repec:eee:iepoli:v:39:y:2017:i:c:p:36-44 is not listed on IDEAS
    4. Antonioli, Davide & Manzalini, Rocco & Pini, Paolo, 2011. "Innovation, workers skills and industrial relations: Empirical evidence from firm-level Italian data," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(3), pages 312-326, May.
    5. repec:wfo:wstudy:45200 is not listed on IDEAS
    6. Hempell, Thomas, 2003. "Do Computers Call for Training? Firm-level Evidence on Complementarities Between ICT and Human Capital Investments," ZEW Discussion Papers 03-20, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    7. repec:iab:iabzaf:v:39:i:2:p:201-233 is not listed on IDEAS
    8. repec:iab:iabmit:v:35:i:4:p:506-522 is not listed on IDEAS

    More about this item

    Keywords

    organizational change; ICT; skill structure;

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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