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Computers and Pay

Published online by Cambridge University Press:  26 March 2020

Francis Green ,
Alan Felstead ,
Duncan Gallie  and
Ying Zhou
Francis Green*
Affiliation:
Kent University
Alan Felstead
Affiliation:
Cardiff University
Duncan Gallie
Affiliation:
Nuffield College, Oxford University
Ying Zhou
Affiliation:
Nuffield College, Oxford University
*
e-mail: G.F.Green@kent.ac.uk
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Abstract

This paper describes the diffusion of computer use among jobs in Britain, and shows that the technology is having notable effects on the labour market. By 2006 three in four jobs entailed job-holders using computers, while for two in four jobs computer use was essential. Computing skills have a significant impact on pay but, in 2006, much of this effect is interactive with what we term ‘influence skills’. The average effect of a unit increase in the Computing Skills index (which ranges from 0 to 4) is to raise pay by an estimated 5.3 per cent and 6.0 per cent for men and women respectively. For men there is an additional 19.2 per cent boost to pay in establishments where at least three quarters of workers are working with computers, compared to establishments where no one uses computers. These effects are greater for those people in jobs with above-average influence skills requirements. Our estimates allow for education, a large number of other generic skills and other conventional controls, which makes them more robust to the critique that they are overestimates because they might suffer from omitted skill bias. IV estimates show only small differences from the OLS estimates. We also find that the direct and interactive effects of computer skills and influence skills have risen over the decade, indicating increased scarcity.

Keywords

Paywagescomputing skillsgeneric skillsinformation technologyJ31O33
Type
Articles
Information
National Institute Economic Review , Volume 201 , July 2007 , pp. 63 - 75
Copyright
Copyright © 2007 National Institute of Economic and Social Research

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Footnotes

The 2006 Skills Survey on which this paper is partially based was supported by grants from the Economic and Social Research Council, the Department for Education and Skills; the Department for Trade and Industry, the Learning and Skills Council, the Sector Skills Development Agency, Scottish Enterprise, Futureskills Wales, Highlands and Islands Enterprise, East Midlands Development Agency, and the Department for Employment and Learning, Northern Ireland. The analysis reported here is our responsibility alone and cannot be attributed to any of these sponsoring organisations or their representatives. Data from other surveys used are all available at the UK Data Archive.

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