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July 2005
Vol. 6, no. 7

Perspectives on Labour and Income

Who gains from computer use?
Cindy Zoghi and Sabrina Wulff Pabilonia

  • Computers should increase the productivity of workers using them, or else employers would not invest in the technology. It is also implied that wages should be higher for workers who use computers. A model accounting for basic worker characteristics indicates a naïve computer wage premium of 17%. The term 'naïve' is used since many argue that workers with higher abilities (not directly measured) are generally those given computers. Correcting for the selection bias results in a much smaller premium of 4%.
  • By broad occupational group, managers earned a computer wage premium of 7%, while professionals and trade and technical workers earned about 4%. No significant premium was found in other occupational groups (marketing and sales workers, clerical and administrative workers, and production workers with no trade or certification).
  • The computer wage premium was quite high for workers with an advanced degree (18%) or a bachelor's degree (10%), still positive for those with college or vocational training (3%), and not statistically different from zero for those with a high school diploma or less.

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Authors
Cindy Zoghi and Sabrina Wulff Pabilonia are with the U.S. Bureau of Labor Statistics. Cindy Zoghi can be reached at (202) 691-5680, Sabrina Wulff Pabilonia at (202) 691-5614, or both at perspectives@statcan.gc.ca.


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