Faculty of Economics and Business Administration Publications Database

Does Unmeasured Ability Explain the Higher Wages of New Technology Workers?

Kramarz, Francis
Volume: 41
Number: 8
Pages: 1489 - 1509
Month: August
ISSN-Print: 0014-2921
Link External Source: Online Version
Year: 1997
Keywords: Wage; New technologies; Computers; Ability; Productivity
Abstract: We study the impact on NewTechnologies (NT) on wages using a unique data set that matches data on individuals and on their firms. In his important article on the same topic, Krueger (1993) did not give a definitive answer to the following question: if workers who use NT are better paid, is it because they are abler or because NT increases their productivity. We try to provide a precise answer to this question. Comparing cross-section estimates, firm effect estimates and person effect estimates, we show that computer-based newtechnologies are used by abler workers. These workers appear to become more productive when they get more experienced with these NT. In terms of wage differentials, the introduction of computer-based NT contributes to the increase but less than supposed before. Each year, experience with computer-based NT adds around 1% to the wage of workers using such techniques.