Does Future PC Use Determine Our Wages Today? Evidence from German Panel Data

Silke Anger () and Johannes Schwarze ()
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Johannes Schwarze: University of Bamberg, DIW Berlin and IZA, Bonn

No 429, IZA Discussion Papers from Institute for the Study of Labor (IZA)

Abstract: Using 1985-1999 data from the German Socio-Economic Panel Study (GSOEP) to analyze wages confirms the hypothesis that existing computer wage premiums are determined by individual ability or other unobserved individual characteristics rather than by productivity effects. While a rather large personal computer (PC) wage premium was found in the cross-sectional regressions even after the inclusion of standard controls, the conventional longitudinal regression analysis revealed substantially lower or statistically insignificant coefficients, as have other studies. In addition, a new method of testing the two competing explanations for computer wage differentials against each other was found: future PC variables were employed in the wage regressions in order to obtain a further control for worker heterogeneity. The finding that future PC variables have a statistically significant effect on current wages leads one to conclude that computer wage differentials can be attributed to worker heterogeneity rather than to computer-induced productivity.

Keywords: Computer wage premium; future computer usage; unobserved ability; technological change (search for similar items in EconPapers)
JEL-codes: J31 O33 C23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-pke
Date: 2002-02
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Working Paper: Does Future PC Use Determine Our Wages Today? - Evidence from German Panel Data
Journal Article: Does Future PC Use Determine Our Wages Today? - Evidence from German Panel Data (2003)
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