Working smarter: The skill bias of computer technologies

by Ted Wannell and Jennifer Ali
Business and Labour Market Analysis, May 2002
The evolving workplace series, no. 3

The skill-biased technology change hypothesis emerged in the early 1990s as an explanation for the increasing returns to higher education noted in the U.S. labour market. The hypothesis associates increasing levels of computer investment with an increase in the relative demand for highly skilled workers vis-à-vis less skilled workers, thus raising the wages of more highly skilled workers. Evidence in support of the hypothesis has been based mainly on data that is aggregated either across employers or employees.

The new Workplace and Employee Survey (WES) unites information on employers and employees in a common framework. These data are used to explore the relationship between employers' computer technology investments and employees' training and education, with a particular focus on the education of new hires. Such evidence is required to build the micro-level foundation for the skill-biased technological change hypothesis.

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