New Technologies, Wages and Worker Selection
Goethe University Frankfurt; Institute for the Study of Labor (IZA)
Immeuble Le Descartes II - Centre d'Etudes de l'Emploi
National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST); Institute for the Study of Labor (IZA); Centre for Economic Policy Research (CEPR)
CEPR Discussion Paper Series No. 1761
We study the impact of new technologies (NT) on wages and employment using a unique panel that matches data on individuals and on their firms. As found in the United States (Krueger (1993)), we show that computer users are better paid than non-users (between 15% and 20% more). But we also show that these workers were already better compensated before the introduction of the NTs. Total returns to computer use amount to 2%. Even when possible measurement errors are taken into account, total returns cannot exceed 4%, which is far from the cross-section estimates. Furthermore, computer users are protected from job losses as long as bad business conditions do not last too long. This result holds even after controlling for possible selection biases.
JEL Classification: J31, J64, O33working papers series
Date posted: July 7, 1998
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