Computer Adoption and Returns in Transition

28 Pages Posted: 25 Oct 2004

See all articles by Yemisi Kuku

Yemisi Kuku

Iowa State University

Peter F. Orazem

Iowa State University and IZA; IZA Institute of Labor Economics

Rajesh Singh

Iowa State University

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Date Written: October 2004

Abstract

Data from nine transition economies in Central and Eastern Europe are used to examine the role of computer adoption for returns to education. As in western economies, computers are adopted most heavily by young, educated, English-speaking workers with the best access to local telecommunications infrastructures. These same attributes have been associated with rising relative earnings in transition economies. Controlling for likely simultaneity between computer use and labor market earnings, we find much larger returns to individuals from computer adoption than have been found in established market economies. The large returns are explainable by the high cost of adoption and the scarcity of computer skills. As of 2000, only 14% had ever tried a computer. Consequently, despite much larger individual returns, computers are associated with an 8% increase in average incomes in the nine countries.

Keywords: computer adoption, transition economies, earnings, returns, telecommunications

JEL Classification: O, P2, J31

Suggested Citation

Kuku, Yemisi and Orazem, Peter Francis and Singh, Rajesh, Computer Adoption and Returns in Transition (October 2004). IZA Discussion Paper No. 1360. Available at SSRN: https://ssrn.com/abstract=609922

Yemisi Kuku

Iowa State University ( email )

613 Wallace Road
Ames, IA 50011
United States

Peter Francis Orazem (Contact Author)

Iowa State University and IZA ( email )

260 Heady Hall
Ames, IA 50011
United States
515-294-8656/515-294-7740 (Phone)
515-294-0221 (Fax)

IZA Institute of Labor Economics

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

Rajesh Singh

Iowa State University ( email )

613 Wallace Road
Ames, IA 50011
United States

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