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The Wage Effects of Computer Use: Evidence from WERS 2004

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  • Peter Dolton
  • Panu Pelkonen

Abstract

Computers and ICT have changed the way we live and work. The latest Workplace Employment Relations Survey (WERS) 2004 provides a snapshot of how using ICT has revolutionized the workplace. Various studies have suggested that the use of a computer at work boosted earnings by as much as 20 per cent. Others suggest this reported impact is due to unobserved heterogeneity. Using excellent data from the WERS employer–employee matched sample, we compare ordinary least squares (OLS) estimates with those from alternative estimation methods and those which include controls for workplace and occupation interactions. We show that OLS estimates overstate the return to computer use but that including occupation and workplace controls, reduces the return to around 3 per cent. We explore the return on different IT skills and find a small return to the use of the ‘office IT function’ and the intensity of computer use as measured by the number of tasks a computer is used for.

Suggested Citation

  • Peter Dolton & Panu Pelkonen, 2008. "The Wage Effects of Computer Use: Evidence from WERS 2004," British Journal of Industrial Relations, London School of Economics, vol. 46(4), pages 587-630, December.
    • Handle: RePEc:bla:brjirl:v:46:y:2008:i:4:p:587-630
    DOI: 10.1111/j.1467-8543.2008.00696.x
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    1. Francis Green & Alan Felstead & Duncan Gallie & Golo Henseke, 2016. "Skills and work organisation in Britain: a quarter century of change [Fertigkeiten, Fertigkeitsanforderungen und Arbeitsorganisation in Grossbritannien: Trends über das letzten Vierteljahrhundert]," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 49(2), pages 121-132, October.
    2. Melanie K. Jones & Peter J. Sloane, 2010. "Disability and Skill Mismatch," The Economic Record, The Economic Society of Australia, vol. 86(s1), pages 101-114, September.
    3. Engelbert Stockhammer, 2017. "Determinants of the Wage Share: A Panel Analysis of Advanced and Developing Economies," British Journal of Industrial Relations, London School of Economics, vol. 55(1), pages 3-33, March.
    4. Wickham James, 2011. "Low Skill Manufacturing Work: from skill biased change to technological Regression / Niedrig qualifizierte Industriearbeit: vom qualifikationsbeeinflussten Strukturwandel zur technologischen Regressio," Arbeit, De Gruyter, vol. 20(3), pages 224-238, September.

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