Has ICT Polarized Skill Demand? Evidence from Eleven Countries over Twenty-Five Years

Guy Michaels, Ashwini Natraj and John van Reenen
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Ashwini Natraj: Centre for Economic Performance and London School of Economics

The Review of Economics and Statistics, 2014, vol. 96, issue 1, 60-77

Abstract: We test the hypothesis that information and communication technologies (ICT) polarize labor markets by increasing demand for the highly educated at the expense of the middle educated, with little effect on low-educated workers. Using data on the United States, Japan, and nine European countries from 1980 to 2004, we find that industries with faster ICT growth shifted demand from middle-educated workers to highly educated workers, consistent with ICT-based polarization. Trade openness is also associated with polarization, but this is not robust to controlling for R&D. Technologies account for up to a quarter of the growth in demand for highly educated workers. © 2014 The President and Fellows of Harvard College and the Massachusetts Institute of Technology

Keywords: technology; ICT; skill demand; polarization; wage inequality (search for similar items in EconPapers)
JEL-codes: J23 J24 O33 (search for similar items in EconPapers)
Date: 2014
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