Returns to Pencil Use Revisited

Posted: 2 Mar 2011

See all articles by Alexandra Spitz-Oener

Alexandra Spitz-Oener

Humboldt University of Berlin; Government of the Federal Republic of Germany - Institute for Employment Research (IAB); IZA Institute of Labor Economics

Date Written: July 1, 2008

Abstract

Many researchers believe that the observed positive association between computer use and wages simply reflects unobserved heterogeneity: like pencils and other "whitecollar" tools, computers are assigned to employees who possess productive attributes that would attract higher wages in any event. This study evaluates that claim by identifying the mechanisms through which computers changed the wage structure in West Germany in the late 1990s. The author finds that the spread of computers - but not of pencils - shifted the task composition of occupations toward analytical and interactive tasks that are complementary to computers’ capabilities, and away from routine cognitive and manual tasks for which computers tend to substitute. Employees possessing computer-complementary skills enjoyed wage increases because computers both raised the demand for their skills and increased their marginal product.

Keywords: computer use, wages

JEL Classification: E24, J24

Suggested Citation

Spitz-Oener, Alexandra, Returns to Pencil Use Revisited (July 1, 2008). Industrial and Labor Relations Review, Vol. 61, No. 4, 2008, Available at SSRN: https://ssrn.com/abstract=1773039

Alexandra Spitz-Oener (Contact Author)

Humboldt University of Berlin ( email )

Unter den Linden 6
Berlin, AK Berlin 10099
Germany

Government of the Federal Republic of Germany - Institute for Employment Research (IAB) ( email )

Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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