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Abstract:

Journal article
Has ICT Polarized Skill Demand? Evidence from Eleven Countries over Twenty-Five Years
Guy Michaels, Ashwini Natraj and John Van Reenen March 2014

Review of Economics and Statistics 96(1), 2014
DOI: 10.1162/REST_a_00366
https://www.mitpressjournals.org/doi/abs/10.1162/REST_a_00366


JEL Classification: J23; J24; O33


Tags: technology; trade; skill demand; wage inequality

We test the hypothesis that information and communication technologies (ICT) polarize labor markets by increasing demand for the highly educated at the expense of the middle educated, with little effect on low-educated workers. Using data on the United States, Japan, and nine European countries from 1980 to 2004, we find that industries with faster ICT growth shifted demand from middle-educated workers to highly educated workers, consistent with ICT-based polarization. Trade openness is also associated with polarization, but this is not robust to controlling for R&D. Technologies account for up to a quarter of the growth in demand for highly educated workers.

DOI: 10.1162/REST_a_00366
https://www.mitpressjournals.org/doi/abs/10.1162/REST_a_00366