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If not computers then what? Returns to computer use in the UK revisited

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Abstract:

In recent years much attention has been paid to the effect on wages of skill-biased technology, especially the use of computers. Although empirical studies have shown a positive relationship between computer-use and earnings, doubts have been cast on whether this is a causal relationship or merely represents unobserved other factors, which are themselves positively linked to computer usage. This study provides evidence that computers themselves raise wages. Although their impact on wages falls as other controls are included in the regression, it still remains significant whilst the effect of another proxy for unobserved factors becomes insignificant. Furthermore, improvements in computer use have an additional impact on earnings, supporting the productivity interpretation.

Document Type: Research Article

DOI: http://dx.doi.org/10.1080/00036840500427668

Affiliations: 1: Department of Economics, University of Wales Swansea, James Callaghan Building, Singleton Park, Swansea, SA2 8PP, UK 2: Department of Economics, London School of Economics, Houghton Street, London, WC2A 2AE, UK

Publication date: December 10, 2006

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