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The Role of ICT in Economic Development – A Partial Survey
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Berman, Bound and Griliches (1994) use data from US manufacturing industries to
examine the sources of increased demand for skilled workers. Similar to Autor
et al.
(1997),
they report that most of the increases in demand for skilled labor stem from within-industry
effects. Further, they investigate whether the increase in demand for skilled labor is due to
computer use. Based on their indicator of skill upgrading (i.e. the annual change in the non-
production workers’ share of the wage bill), they report that between 25-50 percent of the
increase in demand for skilled labor may be explained by the diffusion of computers. Regardless
of the causal link, the authors note that within-industry skill upgrading has occurred primarily in
those industries that have invested most heavily in computers. A similar conclusion is echoed in
Autor
et al.
(1997), who note that increases in the demand for skilled labor are concentrated in
the most computer-intensive sectors of the US economy.
The papers by Autor
et al.
(1997) and Berman
et al.
(1994) suggest that increases in US
wage inequality are driven largely by the increase in relative demand generated by the diffusion
of computers. Since the diffusion of computers is fairly widespread in the developed world, it
would be instructive to examine whether similar patterns of changes in relative wages prevail in
other developed countries. To examine this pattern, Card, Kramarz and Lemieux (1997) use
labor survey data from the beginning and the end of the 1980s from the US, Canada and France
to examine the impact of the diffusion of computers on wage growth. Specifically, they
construct narrowly defined age-education cells and examine the effect of computer use rates (the
share of computer users in each group) on the wage growth of these age-education cells. Their
results show that in the case of the US, the effect of computer use on wage growth is as expected.
For both males and females, wage growth is positively correlated with computer use. The
Canadian data indicate no strong relationship. The results for France are quite surprising as they
suggest that average wage changes for both men and women are negatively linked to computer
use, i.e. workers who use computer technology more intensively report lower growth in wages
than workers who do not use these technologies.
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