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Has technology hurt less skilled workers? A survey of the micro-econometric evidence

Author

Listed:
  • Lucy Chennells

    (Institute for Fiscal Studies)

  • John Van Reenen

    (Institute for Fiscal Studies)

Abstract

There is a growing concern in advanced countries that the position of less skilled workers has deteriorated, either through their ability to secure jobs and/or their ability to earn a decent wage. Some have linked this decline to modern computing technologies. This paper surveys the evidence on the effects of technical change on skills, wages and employment by examining the micro-econometric evidence (we take this to include studies at the industry, firm, plant and individual levels). We focus on over 70 empirical studies that have used direct measures of technology (rather than associating technology with a residual time trend). We first point to three basic methodological problems relating to endogeneity, fixed effects and measurement. Our survey comes to the following tentative conclusions: (i) there is a strong effect of technology on skills in the cross section which appears reasonably robust to various econometric problems; (ii) there is a strong effect of diffusion of technologies on wages in the cross section which is not robust to endogeneity and fixed effects; (iii) at the firm level product innovations appear to raise employment growth, but there is no clear evidence of a robust effect (either positive or negative) of process innovations or R&D on jobs.

Suggested Citation

  • Lucy Chennells & John Van Reenen, 1999. "Has technology hurt less skilled workers? A survey of the micro-econometric evidence," IFS Working Papers W99/27, Institute for Fiscal Studies.
    • Handle: RePEc:ifs:ifsewp:99/27
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    File URL: http://www.ifs.org.uk/wps/wp9927.pdf
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    References listed on IDEAS

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    1. Allen, Steven G, 2001. "Technology and the Wage Structure," Journal of Labor Economics, University of Chicago Press, vol. 19(2), pages 440-483, April.
    2. Bartel, Ann P & Sicherman, Nachum, 1998. "Technological Change and the Skill Acquisition of Young Workers," Journal of Labor Economics, University of Chicago Press, vol. 16(4), pages 718-755, October.
    3. Ann P. Bartel & Nachum Sicherman, 1999. "Technological Change and Wages: An Interindustry Analysis," Journal of Political Economy, University of Chicago Press, vol. 107(2), pages 285-325, April.
    4. James D. Adams, 1997. "The Structure of Firm R&D and the Factor Intensity of Production," NBER Working Papers 6099, National Bureau of Economic Research, Inc.
    5. Bartel, Ann P & Lichtenberg, Frank R, 1987. "The Comparative Advantage of Educated Workers in Implementing New Technology," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 1-11, February.
    6. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1998. "Computing Inequality: Have Computers Changed the Labor Market?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(4), pages 1169-1213.
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    More about this item

    Keywords

    Employment; Wages; Skills; Technology;
    All these keywords.

    JEL classification:

    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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