DP1761 New Technologies, Wages and Worker Selection

Author(s): Horst Entorf, Michel Gollac, Francis Kramarz
Publication Date: December 1997
Keyword(s): Computers, skill-biased technical change, Unemployment, Wages
JEL(s): J31, J64, O33
Programme Areas: Human Resources
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=1761

We study the impact of new technologies (NT) on wages and employment using a unique panel that matches data on individuals and on their firms. As found in the United States (Krueger (1993)), we show that computer users are better paid than non-users (between 15% and 20% more). But we also show that these workers were already better compensated before the introduction of the NTs. Total returns to computer use amount to 2%. Even when possible measurement errors are taken into account, total returns cannot exceed 4%, which is far from the cross-section estimates. Furthermore, computer users are protected from job losses as long as bad business conditions do not last too long. This result holds even after controlling for possible selection biases.