Paying to Program? Engineering Brand and High-Tech Wages

47 Pages Posted: 19 Feb 2019

See all articles by Prasanna Tambe

Prasanna Tambe

Wharton School, U. Pennsylvania

Xuan Ye

Boston College - Carroll School of Management

Peter Cappelli

University of Pennsylvania Wharton School - Center for Human Resources; National Bureau of Economic Research (NBER); University of Pennsylvania - Management Department

Date Written: February 2019

Abstract

We test the hypothesis that IT workers accept a compensating differential to work with emerging IT systems, and that employers that invest in these systems can, in turn, capture greater value from the wages they pay. We show that much of the utility IT workers derive from these systems is from skills acquired on the job. This is principally true for younger workers at employers where skill development is encouraged, and the effects are stronger in thicker markets where workers with newer skills have more outside options. An analysis of the text in online employer reviews supports the notion that IT workers value access to interesting IT systems above most other employer attributes. These findings are important because first, they provide evidence of how worker preferences can influence corporate IT investment decisions; second, because they shed light on factors influencing IT skill development; and third, because they point to a potentially important explanation for returns from IT investments.

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Suggested Citation

Tambe, Prasanna and Ye, Xuan and Cappelli, Peter, Paying to Program? Engineering Brand and High-Tech Wages (February 2019). NBER Working Paper No. w25552. Available at SSRN: https://ssrn.com/abstract=3336503

Prasanna Tambe (Contact Author)

Wharton School, U. Pennsylvania ( email )

Philadelphia, PA 19104
United States

Xuan Ye

Boston College - Carroll School of Management ( email )

140 Commonwealth Avenue
Chestnut Hill, MA 02467
United States

Peter Cappelli

University of Pennsylvania Wharton School - Center for Human Resources ( email )

3733 Spruce Street, Vance Hall
Philadelphia, PA 19104-6358
United States

HOME PAGE: http://www.wharton.upenn.edu/faculty/cappelli.html

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

University of Pennsylvania - Management Department ( email )

The Wharton School
Philadelphia, PA 19104-6370
United States

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