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

Luc Behaghel, Eve Caroli () and Emmanuelle Walkowiak

No 2011-4, EconomiX Working Papers from University of Paris Nanterre, EconomiX

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: Technical change; labour turnover; skill bias; training; internal labour markets (search for similar items in EconPapers)
JEL-codes: J23 J24 J41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-hrm, nep-ict and nep-lab
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
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Related works:
Journal Article: Information and communication technologies and skill upgrading: the role of internal vs external labour markets (2012) Downloads
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) Downloads
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