DP1490 Small Firms, Contracting-out, Computers and Wage Inequality: Evidence from UK Manufacturing

Author(s): Jonathan Haskel
Publication Date: October 1996
Keyword(s): Computers, Skill Premia, Small Firms, UK, Wage Inequality
JEL(s): J31
Programme Areas: Human Resources
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=1490

What demand-side and institutional factors raised the skilled wage premium over the 1980s in UK manufacturing? Using a panel of 80 industries for 1980?89 we find that: (i) the average skill premium rose by around 13 percentage points; (ii) computer introduction explains around 50% of this rise; (iii) growth in small firms and in contracting-out together explain around 20%; and (iv) the fall in unionisation explains around 15%.