IDEAS home Printed from https://ideas.repec.org/a/inm/orisre/v18y2007i2p193-210.html
   My bibliography  Save this article

Research Note---Comparing IT Workers’ Compensation Across Country Contexts: Demographic, Human Capital, and Institutional Factors

Author

Listed:
  • Natalia Levina

    (Stern School of Business, New York University, Information Systems Group/IOMS, 44 West Fourth Street, New York, New York 10012)

  • Mingdi Xin

    (Stern School of Business, New York University, Information Systems Group/IOMS, 44 West Fourth Street, New York, New York 10012)

Abstract

As the IT workforce becomes global, it is increasingly important to understand the factors affecting IT workers’ compensation in labor markets distributed across the globe. Ang et al. (2002) published the first in-depth analysis of compensation for IT professionals juxtaposing human capital endowment (education and experience) and institutional determinants (firm’s size, industry, and sector) of compensation in the Singaporean economy. In this paper, we explore the influence of particular national economies on IT workers’ compensation. We draw on research into the roots of wage differentials in labor economics and build on the Ang et al. research to present a multilevel analysis of IT workers’ compensation in the United States, analyzing the U.S. Bureau of Labor Statistics’ Current Population Survey (CPS) data for 1997, 2001, and 2003.We find that, while institutional differences in Singapore mattered only in conjunction with individual factors, in the U.S. institutional differences had a direct effect on IT workers’ wages. As tightness of IT labor supply decreased in the United States in the early 2000s, the influence of a firm’s size on wages became more pronounced. Also, female IT workers and workers without a college degree fared worse than their male and college-educated counterparts as the IT job market slowed down.We suggest that factors such as presence of job search friction, diversity in the educational system, geographical differences in cost of living, labor mobility, and shortages in IT labor supply vis-à-vis demand help explain the differences among countries. We conclude by outlining the implications of these findings for IT workers, firms, and policy makers.

Suggested Citation

  • Natalia Levina & Mingdi Xin, 2007. "Research Note---Comparing IT Workers’ Compensation Across Country Contexts: Demographic, Human Capital, and Institutional Factors," Information Systems Research, INFORMS, vol. 18(2), pages 193-210, June.
    • Handle: RePEc:inm:orisre:v:18:y:2007:i:2:p:193-210
    DOI: 10.1287/isre.1070.0121
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/isre.1070.0121
    Download Restriction: no
    File URL: https://libkey.io/10.1287/isre.1070.0121?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Broersma, Lourens & Gautier, Pieter, 1997. "Job Creation and Job Destruction by Small Firms: An Empirical Investigation for the Dutch Manufacturing Sector," Small Business Economics, Springer, vol. 9(3), pages 211-224, June.
    2. Mincer, Jacob & Polachek, Solomon, 1974. "Family Investment in Human Capital: Earnings of Women," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages 76-108, Part II, .
    3. John M. Abowd & Francis Kramarz & David N. Margolis, 1999. "High Wage Workers and High Wage Firms," Econometrica, Econometric Society, vol. 67(2), pages 251-334, March.
    4. Becker, Gary S, 1985. "Human Capital, Effort, and the Sexual Division of Labor," Journal of Labor Economics, University of Chicago Press, vol. 3(1), pages 33-58, January.
    5. Eli Talmor & James S. Wallace, 1998. "Computer Industry Executives: An Analysis of the New Barons' Compensation," Information Systems Research, INFORMS, vol. 9(4), pages 398-414, December.
    6. Mark C. Anderson & Rajiv D. Banker & Sury Ravindran, 2000. "Executive Compensation in the Information Technology Industry," Management Science, INFORMS, vol. 46(4), pages 530-547, April.
    7. Francine D. Blau & Lawrence M. Kahn, 2000. "Gender Differences in Pay," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 75-99, Fall.
    8. Preston, Anne E, 1989. "The Nonprofit Worker in a For-Profit World," Journal of Labor Economics, University of Chicago Press, vol. 7(4), pages 438-463, October.
    9. Bound, John & Holzer, Harry J, 1993. "Industrial Shifts, Skills Levels, and the Labor Market for White and Black Males," The Review of Economics and Statistics, MIT Press, vol. 75(3), pages 387-396, August.
    10. Walter Oi, 1983. "The Fixed Employment Costs of Specialized Labor," NBER Chapters, in: The Measurement of Labor Cost, pages 63-122, National Bureau of Economic Research, Inc.
    11. Schaffner, Julie Anderson, 1998. "Premiums to employment in larger establishments: evidence from Peru," Journal of Development Economics, Elsevier, vol. 55(1), pages 81-113, February.
    12. David Orr, 1999. "Book," Journal of Industrial Ecology, Yale University, vol. 3(4), pages 155-156, October.
    13. Erkan Erdil & I. Hakan Yetkiner, 2001. "A comparative analysis of inter-industry wage differentials: industrialized versus developing countries," Applied Economics, Taylor & Francis Journals, vol. 33(13), pages 1639-1648.
    14. Lilach Nachum, 2000. "Economic Geography and the Location of TNCs: Financial and Professional Service FDI to the USA," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 31(3), pages 367-385, September.
    15. Burdett, Kenneth & Mortensen, Dale T, 1998. "Wage Differentials, Employer Size, and Unemployment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(2), pages 257-273, May.
    16. Jacob Mincer, 1993. "Studies In Human Capital," Books, Edward Elgar Publishing, number 316.
    17. Soon Ang & Sandra Slaughter & Kok Yee Ng, 2002. "Human Capital and Institutional Determinants of Information Technology Compensation: Modeling Multilevel and Cross-Level Interactions," Management Science, INFORMS, vol. 48(11), pages 1427-1445, November.
    18. Mellow, Wesley, 1982. "Employer Size and Wages," The Review of Economics and Statistics, MIT Press, vol. 64(3), pages 495-501, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jonathan Whitaker & Sunil Mithas & Che-Wei Liu, 2019. "Beauty Is in the Eye of the Beholder: Toward a Contextual Understanding of Compensation of Information Technology Professionals Within and Across Geographies," Information Systems Research, INFORMS, vol. 30(3), pages 892-911, September.
    2. Damien Joseph & Soon Ang & Sandra A. Slaughter, 2015. "Turnover or Turnaway? Competing Risks Analysis of Male and Female IT Professionals’ Job Mobility and Relative Pay Gap," Information Systems Research, INFORMS, vol. 26(1), pages 145-164, March.
    3. Sunil Mithas & M. S. Krishnan, 2009. "From Association to Causation via a Potential Outcomes Approach," Information Systems Research, INFORMS, vol. 20(2), pages 295-313, June.
    4. Prasanna Tambe & Lorin M. Hitt, 2014. "Job Hopping, Information Technology Spillovers, and Productivity Growth," Management Science, INFORMS, vol. 60(2), pages 338-355, February.
    5. Prasanna Tambe & Lorin M. Hitt, 2012. "Now IT's Personal: Offshoring and the Shifting Skill Composition of the U.S. Information Technology Workforce," Management Science, INFORMS, vol. 58(4), pages 678-695, April.
    6. Prasanna Tambe & Xuan Ye & Peter Cappelli, 2019. "Paying to Program? Engineering Brand and High-Tech Wages," NBER Working Papers 25552, National Bureau of Economic Research, Inc.
    7. Il-Horn Hann & Jeffrey A. Roberts & Sandra A. Slaughter, 2013. "All Are Not Equal: An Examination of the Economic Returns to Different Forms of Participation in Open Source Software Communities," Information Systems Research, INFORMS, vol. 24(3), pages 520-538, September.
    8. Prasanna Tambe, 2014. "Big Data Investment, Skills, and Firm Value," Management Science, INFORMS, vol. 60(6), pages 1452-1469, June.
    9. Luciana Castro Gonçalves, 2012. "Learning Dynamics across Boundaries of IS Context: A Structural perspective to Support Knowledge Management," Post-Print hal-02340306, HAL.
    10. Prasanna Tambe & Xuan Ye & Peter Cappelli, 2020. "Paying to Program? Engineering Brand and High-Tech Wages," Management Science, INFORMS, vol. 66(7), pages 3010-3028, July.
    11. Keongtae Kim & Sunil Mithas & Jonathan Whitaker & Prasanto K. Roy, 2014. "Research Note —Industry-Specific Human Capital and Wages: Evidence from the Business Process Outsourcing Industry," Information Systems Research, INFORMS, vol. 25(3), pages 618-638, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Soon Ang & Sandra Slaughter & Kok Yee Ng, 2002. "Human Capital and Institutional Determinants of Information Technology Compensation: Modeling Multilevel and Cross-Level Interactions," Management Science, INFORMS, vol. 48(11), pages 1427-1445, November.
    2. Giuseppe Bertola & Pietro Garibaldi, 2001. "Wages and the Size of Firms in Dynamic Matching Models," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 4(2), pages 335-368, April.
    3. Feng, Shuaizhang & Zheng, Bingyong, 2010. "Imperfect Information, On-the-Job Training, and the Employer Size-Wage Puzzle: Theory and Evidence," IZA Discussion Papers 4998, Institute of Labor Economics (IZA).
    4. Maria Kravtsova & Aleksey Oshchepkov, 2019. "Market And Network Corruption," HSE Working papers WP BRP 209/EC/2019, National Research University Higher School of Economics.
    5. Müller, Bettina, 2008. "Matching of Individuals for Start-Ups: A Test of the O-Ring Theory," ZEW Discussion Papers 08-112, ZEW - Leibniz Centre for European Economic Research.
    6. David Card & Ana Rute Cardoso & Joerg Heining & Patrick Kline, 2018. "Firms and Labor Market Inequality: Evidence and Some Theory," Journal of Labor Economics, University of Chicago Press, vol. 36(S1), pages 13-70.
    7. Francine D. Blau & Lawrence M. Kahn, 2006. "The U.S. Gender Pay Gap in the 1990S: Slowing Convergence," ILR Review, Cornell University, ILR School, vol. 60(1), pages 45-66, October.
    8. Thierry Lallemand & Robert Plasman & François Rycx, 2007. "The establishment-size wage premium: evidence from European countries," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 34(5), pages 427-451, December.
    9. Piekkola, Hannu, 2000. "Unobserved Human Capital and Firm-Size Premium," Discussion Papers 739, The Research Institute of the Finnish Economy.
    10. Jeremy T. Fox, 2009. "Firm-Size Wage Gaps, Job Responsibility, and Hierarchical Matching," Journal of Labor Economics, University of Chicago Press, vol. 27(1), pages 83-126, January.
    11. Victor Rudakov & Ilya Prakhov, 2019. "Gender Wage Inequality In Russian Universities," HSE Working papers WP BRP 208/EC/2019, National Research University Higher School of Economics.
    12. Akan Kadyrbekov & Dmitry Veselov, 2019. "Migration Of Russian Settlers And The Legacy Of Inter-Regional Development In Kazakhstan," HSE Working papers WP BRP 210/EC/2019, National Research University Higher School of Economics.
    13. Benoit Dostie & Mohsen Javdani, 2020. "Not for the Profit, But for the Training? Gender Differences in Training in the For‐Profit and Non‐Profit Sectors," British Journal of Industrial Relations, London School of Economics, vol. 58(3), pages 644-689, September.
    14. Andres Erosa & Luisa Fuster & Diego Restuccia, 2010. "A General Equilibrium Analysis of Parental Leave Policies," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(4), pages 742-758, October.
    15. Jannet Farida Jacob, 2018. "Human capital and higher education: rate of returns across disciplines," Economics Bulletin, AccessEcon, vol. 38(2), pages 1241-1256.
    16. Christopher Dougherty, 2005. "Why Are the Returns to Schooling Higher for Women than for Men?," Journal of Human Resources, University of Wisconsin Press, vol. 40(4), pages 969-988.
    17. Vassil, Kristjan & Eamets, Raul & Mõtsmees, Pille, 2014. "Socio-demographic Model of Gender Gap in Expected and Actual Wages in Estonia," IZA Discussion Papers 8604, Institute of Labor Economics (IZA).
    18. Biro, Aniko & Bisztray, Márta & da Fonseca, João G. & Molnár, Tímea Laura, 2023. "Accident-Induced Absence from Work and Wage Ladders," IZA Discussion Papers 16312, Institute of Labor Economics (IZA).
    19. Alice Guyot & Stefan Berwing & Maria Lauxen-Ulbrich, 2009. "Income Differentials on Regional Labour Markets in Southwest Germany," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 56(3), pages 379-396, September.
    20. Alexandra Cortés Aguilar & María Alejandra Flórez Vera, 2016. "Diferencias salariales por género en el departamento de Santander - Colombia," Apuntes del Cenes, Universidad Pedagógica y Tecnológica de Colombia, vol. 35(61), pages 267-302, January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:orisre:v:18:y:2007:i:2:p:193-210. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.