Information and Communication Technologies and Skill Upgrading: The Role of Internal vs. External Labour Markets

Luc Behaghel, Eve Caroli and Emmanuelle Walkowiak

No 5494, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Following the adoption of information and communication technologies (ICT), firms are likely to face increasing skill requirements. They may react either by training or hiring the new skills, or by a combination of both. We first show that ICT are indeed skill biased and we then assess the relative importance of external and internal labour market strategies. We show that skill upgrading following ICT adoption takes place mostly through internal labour markets adjustments. The introduction of ICT is associated with an upward shift in firms’ occupational structure, of which one third is due to hiring and firing workers from and to the external labour market, whereas two-thirds are due to promotions. Moreover, we find no compelling evidence of external labour market strategies based on "excess turnover". In contrast, French firms heavily rely on training in order to upgrade the skill level of their workforce, even if this varies across industries.

Keywords: skill bias; technical change; internal labour markets; labour turnover; training (search for similar items in EconPapers)
JEL-codes: J23 J24 J41 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2011-02
New Economics Papers: this item is included in nep-bec, nep-ict and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Published - published in: Oxford Economic Papers, 2012, 64 (3), 490-517.

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Related works:
Journal Article: Information and communication technologies and skill upgrading: the role of internal vs external labour markets (2012)
Working Paper: Information and Communication Technologies and Skill Upgrading: the Role of Internal vs External Labour Markets (2012)
Working Paper: Information and Communication Technologies and Skill Upgrading: the Role of Internal vs External Labour Markets (2012)
Working Paper: Information and Communication Technologies and Skill Upgrading: the Role of Internal vs External Labour Markets (2011)
Working Paper: Information and Communication Technologies and Skill Upgrading: the Role of Internal vs External Labour Markets (2011)
Working Paper: Do internal labour markets survive in the New Economy? The Case of France (2009)
Working Paper: Innovation and skill upgrading: The role of external vs internal labour markets (2008)
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