The Impact of Information Technology on High-Skilled Labor in Services: Evidence from Firm-Level Panel Data

27 Pages Posted: 9 Nov 2003

See all articles by Martin Falk

Martin Falk

ZEW – Leibniz Centre for European Economic Research

Katja Seim

Yale School of Management

Date Written: 1999

Abstract

This paper analyses the link between the high-skilled employment share and the level of investment in information technology (IT) in the service production process. The analysis is based on an unbalanced panel data set for 933 West German firms over the period 1994-1996. To account for firms which do not employ high-skilled labor, proxied by university graduates, fixed and random effects Tobit models are applied. We investigate whether the importance of IT varies across subsectors by allowing coeficients to differ across the main service sector industries. The empirical evidence indicates that firms with a higher IT investment to output ratio employ a larger fraction of high-skilled workers. However, the size of the IT effect on skill intensity is rather small.

Keywords: demand for high-skilled labor, information technology, service sector, panel data

JEL Classification: J23, O33, L8

Suggested Citation

Falk, Martin and Seim, Katja, The Impact of Information Technology on High-Skilled Labor in Services: Evidence from Firm-Level Panel Data (1999). ZEW Discussion Paper No. 99-58, Available at SSRN: https://ssrn.com/abstract=376228 or http://dx.doi.org/10.2139/ssrn.376228

Martin Falk (Contact Author)

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1 D-68161 Mannheim
Germany

Katja Seim

Yale School of Management ( email )

135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
United States

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