Has technology hurt less skilled workers? A survey of the micro-econometric evidence

Lucy Chennells and John van Reenen
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Lucy Chennells: Institute for Fiscal Studies

No W99/27, IFS Working Papers from Institute for Fiscal Studies

Abstract: There is a growing concern in advanced countries that the position of less skilled workers has deteriorated, either through their ability to secure jobs and/or their ability to earn a decent wage. Some have linked this decline to modern computing technologies. This paper surveys the evidence on the effects of technical change on skills, wages and employment by examining the micro-econometric evidence (we take this to include studies at the industry, firm, plant and individual levels). We focus on over 70 empirical studies that have used direct measures of technology (rather than associating technology with a residual time trend). We first point to three basic methodological problems relating to endogeneity, fixed effects and measurement. Our survey comes to the following tentative conclusions: (i) there is a strong effect of technology on skills in the cross section which appears reasonably robust to various econometric problems; (ii) there is a strong effect of diffusion of technologies on wages in the cross section which is not robust to endogeneity and fixed effects; (iii) at the firm level product innovations appear to raise employment growth, but there is no clear evidence of a robust effect (either positive or negative) of process innovations or R&D on jobs.

Keywords: Employment; Wages; Skills; Technology (search for similar items in EconPapers)
JEL-codes: J51 O33 (search for similar items in EconPapers)
Pages: 69 pp
Date: 1999-01-01
New Economics Papers: this item is included in nep-dev, nep-ino, nep-lab and nep-tid
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Citations: View citations in EconPapers (37)

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