Wages and the Use of New Technologies: An Empirical Analysis of the Swiss Labor Market

Axel Franzen

Swiss Journal of Economics and Statistics (SJES), 2001, vol. 137, issue IV, 505-523

Abstract: Wage inequality as well as the return to education have increased in recent decades in most OECD countries. Most labor economists agree that the increase in wage inequality is due to increased demand for skilled labor. However, there is disagreement as to whether this increased demand is due to skill-biased technological innovation. Some authors (e.g., KRUEGER, 1993) argue that on-the-job use of new technologies increases productivity, and thus earnings. Others (e.g., DINARDO and PISCHKE, 1997) argue that the adoption of new technologies is simply an indication of higher a priori ability. The present study investigates the effects of on-the-job use of personal computers and the Internet using two different micro-level cross-sectional data sets recently conducted in Switzerland. The results suggest that neither on-the-job use of computers nor on-thejob use of the Internet are rewarded by a wage premium. Thus, the study presented replicates findings by ENTORF, GOLLAC and KRAMARZ (1999) and HAISKEN-DENEW and SCHMIDT (1999) who also found no sizable wage bonus for computer use on the French and German labor market.

Date: 2001
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