measuring the spillovers from technical advance mainframe computers in financial services measuring the social gains from recent technological advances is difficult because there are no output indexes from some important adopters measurement methods that infer the willingness to pay of theadopting industries from the derived demand curve for a new technologyovercome this difficulty the derived demand for high speed computersfor use in banks finance and insurance is shown to imply a very largesocial gain to computerization that is not captured by computer manufacturers copyright 1986 by american economic association

training and employee mobility in the british private and public sectors the realization of the value of training for employees can take time as the training contributes dynamically to an extended development process this research examines the empirical returns to training in three post training situations when the employee remains in the same job and with the same employer when the employee transfers to a different job but remains with the same employer internal mobility and when the employee moves to a different employer external mobility panel data and fixed effects fe methodology are used to quantify the joint effects of in job training and mobility while minimizing the potentially biasing effect of unobserved ability in a period when public sector employment in britain was contracting sharply the short term returns to training are nonetheless greater in the public sector while the medium term returns for both public sector and private sector employees depend on remaining within sector the general specific training mix institutional influences adverse selection and the concept of transferable training all contribute to interpretation

estimating griliches k shifts griliches k shift a crucial parameter in the welfare evaluation of technological change is shown to be equal to the radial rate of technological change plus a vector of commodity bias parameters obtained from the distance function the analysis permits decomposition of sectoral productivity growth into productivity growth by commodity the k shifts estimated for wheat corn soybeans and beef in u s agriculture indicate a decrease in the marginal cost of production of corn soybeans and wheat during the 1950 1993 years

labour supply estimation and public policy abstract economists devote considerable energies towards refining their econometric techniques to overcome difficulties connected with conducting empirical research despite advances in technique it is not clear whether further refinement in this direction is worthwhile for policy purposes it may be that no further amount of statistical adjustment of inadequate data will increase understanding and that better data is simply necessary to add to our knowledge but rarely is sufficient credit paid to new forms of data in short econometric technique is emphasized to the neglect of data innovation as if new data were merely lying about waiting for an ingenious suggestion for use this paper surveys advances of the last twenty five years in estimating labour supply for policy purposes with a view towards appreciating the relative contribution of both improvements in econometric technique as well as developments of new data after briefly detailing the key parameters which economists have sought to estimate we describe the early first generation research circa 1970 which is plagued by problems of unobservable variables measurement errors truncation and selectivity bias and non linear budget constraints second generation research constitute attempts to resolve one or more of these difficulties and the respective contribution of econometric technique and new data is acknowledged and assessed including the contribution of data generated by large scale social experiments in which participants are randomly assigned to different guaranteed income plans and their labour supply behaviour measured

skill biased technological change and rising wage inequality some problems and puzzles the recent rise in wage inequality is usually attributed to skill biased technical change sbtc associated with new computer technologies we review the evidence for this hypothesis focusing on the implications of sbtc for overall wage inequality and for changes in wage differentials between groups a key problem for the sbtc hypothesis is that wage inequality stabilized in the 1990s despite continuing advances in computer technology sbtc also fails to explain the evolution of other dimensions of wage inequality including the gender and racial wage gaps and the age gradient in the return to education

family time use leisure home production market work and work related travel this study analyzes the two person gronau type neoclassical model of the household where time use for each person is divided into three basic activities market work home production and pure leisure plus work related travel time the latter is treated as predetermined one contribution of this paper is that the economics of the gronau model is made clear and a complete comparative static analysis is provided a second contribution is that the model is subjected to a rigorous empirical test using data that permits the division of time into its four primary components most data sets do not permit this our empirical results do not accord well with the model s predictions or with previous findings by gronau in addition our results suggest that work related travel has an important influence on family time use

spillovers and governance an analysis of knowledge and reputational spillovers in information technology investigating spillovers potential costs and benefits to a firm that extend beyond an individual transaction i integrate transaction cost theory and the knowledge based view of the firm in an effort to better understand the efficient governance of knowledge contracts with detailed task descriptions were associated with transactions with the potential to generate new and reusable knowledge the risk of a firm s technology spilling over to others and the risk of reputation impairing spillovers were associated with suppliers using their own employees rather than subcontractors thus results suggest that the creation and protection of knowledge are key factors in understanding governance decisions

counterfactual decomposition of changes in wage distributions using quantile regression we propose a method to decompose the changes in the wage distribution over a period of time in several factors contributing to those changes the method is based on the estimation of marginal wage distributions consistent with a conditional distribution estimated by quantile regression as well as with any hypothesized distribution for the covariates comparing the marginal distributions implied by different distributions for the covariates one is then able to perform counterfactual exercises the proposed methodology enables the identification of the sources of the increased wage inequality observed in most countries specifically it decomposes the changes in the wage distribution over a period of time into several factors contributing to those changes namely by discriminating between changes in the characteristics of the working population and changes in the returns to these characteristics we apply this methodology to portuguese data for the period 1986 1995 and find that the observed increase in educational levels contributed decisively towards greater wage inequality copyright 2005 john wiley sons ltd

broadband adoption and firm productivity evaluating the benefits of general purpose technology we examine the relationship between the deployment of broadband which we classify as a general purpose technology and the productivity of the deploying firms using panel data that comprises information on all the major local exchange carriers in the united states telecommunications industry from 1995 to 2000 this relationship is an important indicator of the economic impact of new technology adoption we provide a comprehensive analysis of the literature on general purpose technologies as well as on the economic consequences of information and communications technology diffusion and develop a framework to empirically assess the impact of broadband deployment on the productivity our results find a positive relationship between broadband deployment and the carriers productivity and suggest that encouraging the deployment of broadband technologies in addition to the benefits to consumers and firms at the receiving end of the new technology create the potential for better technological efficiencies and increased productivity for the deploying firms the benefits can be enhanced as the firms studied operate in two sided markets where the network effects brought about by the multitude of interconnections can be substantial because of possible second order spillovers of productivity copyright 2010 the author 2009 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

management ownership and market valuation an empirical analysis we investigate the relationship between management ownership and market valuation of the firm as measured by tobin s q in a 1980 cross section of 371 fortune 500 firms we find evidence of a significant nonmonotonic relationship tobin s q first increases then declines and finally rises slightly as ownership by the board of directors rises for older firms there is evidence that q is lower when the firm is run by a member of the founding family than when it is run by an officer unrelated to the founder

is coal desulphurisation worthwhile evidence from the market abstract the paper develops a forward looking way to estimate the economic benefits of research and development on coal desulphurisation the methodology makes use of survey based techniques pioneered in environmental economics the empirical results illustrate the difficulty of configuring desulphurised coal to meet the requirements of existing electricity generating plants in addition to estimating the returns to investment in coal desulphurisation the contributions of the paper are in extending survey based valuation to meet the needs of r d investors for intelligence about the prospective value of their investments and using robust estimation techniques to reduce the influence of outliers

a microfoundation for production functions assignment of heterogenous workers to heterogenous jobs in very different fields of economics economic inference and policy evaluation require economists to parametrize a production function that links measures of input factors to measures of output while doing so strong assumptions are implicitly made about microeconomic variables governing the shape of the aggregate production function in this paper i develop an assignment model that provides a microeconomic foundation for aggregate production functions the shape of the production function depends crucially on the distribution of workers and jobs and the type of technological changes depends crucially on the evolution of these distributions sufficient and necessary conditions are provided for the production function to be of the constant ratio of elasticities of substitution form a form nesting the broadly used constant elasticity of substitution form this model provides a way to evaluate how stringent assumptions about the type of production function or technological change are by comparing the implied distribution of jobs and its evolution over time to observations of the distribution of jobs and its evolution over time

changes in the distribution of individual earnings in the united states 1967 1986 using micro data from the current population survey the author examines the sensitivity of conclusion regarding time series changes in inequality to the measure of inequality employed and to the population group analyzed although changes in inequality over time are sensitive to the measure of inequality the author finds a general pattern of stable or decreasing inequality throughout the 1970s followed by a period of increasing inequality based upon a decomposition analysis the author concludes that these changes are not simply the results of the changing employment distribution among groups defined by sex age education or industry instead the rise in inequality results from an increase in inequality within these groups copyright 1992 by mit press

technology skill and the wage structure insights from the past recent technological advances and a widening of the wage structure have led many to conclude that technology and human capital are relative complements the possibility that such a relationship exists today has prompted a widely held conjecture that technology and skill have always been relative complements according to this view technological advance always serves to widen the wage structure and only large injections of education slow its relentless course a related literature demonstrates that capital and skill are relative complements today and in the recent past zvi griliches 1969 thus capital deepening appears also to have increased the relative demand for the educated serving further to stretch the wage structure physical capital and technology are now regarded as the relative complements of human capital but have they been so for the past two centuries some answers have already been provided a literature has emerged on the bias to technological change across history that challenges the view that physical capital and human capital have always been relative complements many of the major technological advances of the 19th century substituted physical capital raw materials and unskilled labor for highly skilled artisans john a james and jonathan s skinner 1985 but if physical capital and human skill were not always relative complements when did they become so and when did new technology become skilled labor s complement we argue that capital skill complementarity was manifested in the aggregate economy as particular technologies spread specifically batch and continuous process methods of production across the past two centuries manufacturing shifted first from artisanal to mechanized and nonmechanized factory production then from simple factories to assembly lines and finally from assembly lines to continuous and batch processes although few products were manufactured by more than two of the technologies mentioned manufacturing as a whole progressed in the fashion described in considering our argument it is useful to envision manufacturing as having two distinct stages i a machine installation and machine maintenance segment and ii a production or assembly portion capital and educated skilled labor we will argue are always complements in the machine maintenance segment of manufacturing regardless of the technology machinists for example are needed to install machinery and make it run the workable capital created by skilled labor plus raw capital is then used by unskilled labor to create the final product in the production or assembly segment of manufacturing how the adoption of a technology alters the relative demand for skilled workers will depend on whether the machinemaintenance demand for skilled labor is offset by the production process demand for unskilled labor

the welfare analysis of product innovations with an application to computed tomography scanners the main goal of this paper is to put forward a methodology for the measurement of product innovations using a value metric that is equating the magnitude of innovations with the welfare gains they generate this research design is applied to the case of computed tomography scanners a revolutionary innovation in medical technology the econometric procedure centers on the estimation of a discrete choice model the nested multinominal logit which yields the parameters of a utility function defined over the changing quality dimensions of the innovative product the estimated flow of social gains from innovation is used to compute a social rate of return to r d to explore the interrelation between innovation and diffusion and to trace the time profile of benefits and costs the latter suggesting the possible occurrence of technological cycles

a general model of r d competition and policy this article constructs a model of r d with heterogeneous firms each firm s probability of success is a function of its sunk and recurrent r d expenditures the social gains from an innovation are not fully captured by the successful firm the comparison of the social optimum and the market equilibrium involves balancing spillover and crowding effects pigovian corrective policies as well as strategic policies for a subset of colluding firms are discussed

the solow productivity paradox what do computers do to productivity 1 you don t see computers everywhere in a meaningful economic sense computers and information processing equipment are a relatively small share of gdp and of the capital stock 2 you only thinkyou see computers everywhere government hedonic price indexes for computers fall too fast according to this position and therefore measured real computer output growth is also too fast 3 you may not see computers everywhere but in the industrial sectors where you most see them output is poorly measured examples are finance and insurance which are heavy users of information technology and where even the concept of output is poorly specified 4 whether or not you see computers everywhere some of what they do is not counted in economic statistics examples are consumption on the job convenience better user interface and so forth 5 you don t see computers in the productivity statistics yet but wait a bit and you will this is the analogy with the diffusion of electricity the idea that the productivity implications of a new technology are only visible witlh a long lag 6 you see computers everywhere but in the productivity statistics because computers are not as productive as you think here there are many anecdotes such as failed computer system design projects but there are also assertions from computer science that computer and software design has taken a wrong turn 7 there is no paradox some economists are counting innovations and new products on an arithmetic scale when they should count on a logarithmic scale

retirement wages and labor supply of the elderly a model of labor force participation market wages and labor supply of annual hours and weeks of work is estimated for married males and unmarried females in a sample from the retirement history survey 1969 75 matched with social security earnings records emphasis is placed on the effects of variables associated with retirement and old age and on the estimation of net age profiles purged of biases associated with specific years and cohorts and with the other included variables the effects of most of the usual variables appear to be consistent with the theory and with other empirical findings for both sexes in addition age itself has a strong net autonomous effect on each of the dependent variables due to biological societal or institutional factors

time series evidence on the sources of trends in wage inequality changes in wage inequality have long been a concern of labor economists and public policymakers when the wage premium for college graduates fell during the first half of the 1970 s many researchers blamed the decline on the increase in the relative supply of college graduates when the college wage premium increased dramatically during the 1980 s researchers offered a variety of explanations such as skill biased technological change and the internationalization of the u s economy in this paper we use time series analysis to evaluate the most common explanations given for the trends in wage inequality using cointegration techniques we evaluate the link between the trends in the candidate explanatory variables and wage inequality we show that the only variable that consistently shares the same long run trend with our wage inequality series is the durablegoods trade deficit as a percentage of gdp this variable not only follows the same trend as wage inequality during most of the 1980 s but also for the period from 1949 to 1979 no other single explanation shows the same long run consistency i an analysis of trends in wage inequality

information assets technology and organization although there is good reason to expect that the growth of information work and information technology will significantly affect the trade offs inherent in different structures for organizing work the theoretical basis for these changes remains poorly understood this paper seeks to address this gap by analyzing the incentive effects of different ownership arrangement in the spirit of the grossman hart moore ghm incomplete contracts theory of the firm a key departure from earlier approaches is the inclusion of a role for an information asset analogous to the ghm treatment of property this approach highlights the organizational significance of information ownership and information technology for instance using this framework one can determine when 1 informed workers are more likely to be owners than employees of firms 2 increased flexibility of assets will facilitate decentralization and 3 the need for centralized coordination will lead to centralized ownership the framework developed shed

computers skills and wages computer technology is most prominently used by skilled high wage workers this suggests that computer use requires skills to take full advantage of the possibilities which are particularly present among relatively skilled workers this article develops a simple technology adoption model showing that the decision to adopt computer technology depends on i the tasks to be performed ii the level of skill or education and iii the level of wages applying this model to british data it is shown that the effect of wages and particular tasks on computer adoption is larger than the effect of skills on adoption the estimates suggest that in britain computer use is likely to be a matter of cost efficiency and not so much of workers skills

inequality income growth and mobility the basic facts during the 1950s and 1960s mean wages in the united states grew rapidly and the dispersion around this growing mean changed very litde starting in the 1970s and continuing into the 1980s and 1990s these patterns were reversed mean wages grew slowly and inequality increased rapidly these changes in labor markets were reflected in changes in the distribution of family income the mean of the distribution of family income did increase after 1973 in spite of the near constancy of mean real wages as family members increased the number of hours they worked however the increase in inequality of wages was mirrored by an increase in the dispersion of family income a large descriptive literature has documented the rise in inequality while a smaller behavioral literature has sought to delineate the causes of this rise these changes in the distribution of family income a fected rates of poverty directly during the 1950s and 1960s temporary increases in poverty during recessions were more than offset by declines in poverty during economic expansions as long as the poor gained along with everyone else fi om the secular growth in the mean one could be confident that poverty rates would ratchet down this is exactly what happened as poverty rates fell from 22 4 percent in 1959 to 11 1 percent in 1973

exact consumer s surplus and deadweight loss consumer s surplus is a widely used tool in applied welfare economics both economic theorists and cost benefit analysis often use consumer s surplus despite its somewhat dubious reputation the basic idea is to evaluate the value to a consumer or his willingness to pay for a change in price of a good from say pricep to pricep because price changes affect consumer welfare an evaluation of this effect is often a key input to public policy decisions yet consumer s surplus is probably the most controversial of widely used economic concepts both paul samuelson and ian little conclude that the economics profession would be better off without it it is my feeling of the situation that substantial agreement exists on the correct quantities to be measured the amount the consumer would pay or would need to be paid to be just as well off after the price change as he was before the price change the quantities correspond to john hicks compensating variation measures an alternative measure which takes ex post price change utility as the basis of comparison is hicks equivalent variation the controversy arises in the measurement of these quantities the usual measurement procedure is to use the area to the left of the marshallian market demand curve between two price levels jules dupuit originated this measure of welfare change and alfred marshall and hicks derived appropriate conditions for its use the primary condition for the area to the left of the demand curve to correspond to the compensating variation is to have constant marginal utility of income marshall gave this condition and if it holds the same quantity will be derived as the area to the left of the compensated hicksian demand curve this area to the left of the compensated demand curve is exactly what the compensating variation and equivalent variation measure thus the constant marginal utility of income is a sufficient condition for marshallian consumer s surplus to be equal to hicks consumer s surplus in this case arnold harberger s plea to use the welfare triangle as one half times the product of the price change times the quantity change to measure deadweight loss corresponds to the correct theoretical amount of welfare change in a recent paper robert willig derives bounds for the percentage difference between the correct measure of either the compensating or equivalent variation and the marshallian measure derived form the market demand curve his bounds which depend on the income elasticity of demand for the single good in the region of price change being considered as well as the proportion of the consumer s income spent on the good demonstrate that the marshallian consumer s surplus is often a good approximation to hicks consumer s surplus the fact that the proportion of the consumer s income spent matters as well as the income elasticity was first pointed out by harold hotelling willig contends that the approximation error will be less than the errors involved in estimating the demand curve thus he hopes to remove the need for apology that applied economists often need to give to theorists who remark on the inappropriateness of using marshallian consumer s surplus to measure welfare change however in this paper i show that for the case primarily considered by willig of a single price change which is also the situation in which consumer s surplus is often used in applied work no approximation is necessary professor of economics massachusetts institute of technology and research associate national bureau of economic research i would like to thank peter diamond erwin diewert daniel mcfadden robert merton robert solow hal varian joel yellin and the referees for help and comments research support from the national science foundation is acknowledged the reason that we still have two rather than one of samuelson s six measures of consumer s surplus arises from an index number problem of the correct basis for the welfare comparison i will give both measures but plan to concentrate on the compensating variation

the ces utility function non linear budget constraints and labour supply results on female participation and hours the most recent efforts in the study of labour supply decisions have concentrated on the estimation of explicit utility indices as a means to overcome the specification and endogeneity problems created by non linear budget constraints the presence of non convexities and the interest in making welfare comparisons between individuals are additional reasons that make the use of explicit utility functions in either direct or indirect form an essential requirement for labour supply studies it is therefore important to consider carefully the available possibilities from a utility index we want flexibility and ease of estimation the stonegeary function has proved its relative worth in consumption studies but its performance has been disappointing when leisure is incorporated into the set of commodities abbot and ashenfelter i976 found that for part of their sample estimated available time was less than hours worked and these results have pervasively reappeared in subsequent studies using this function hausman i980 has recently proposed a utility function which yields a linear hours function this is an important contribution which facilitates the task of estimation enormously this paper argues that the ces utility function despite not generating a linear hours function is also very convenient for estimation purposes in fact it is shown below that to estimate the parameters of the utility function there is no need whatsoever for any explicit hours function labour supply responses by married women have been previously estimated with british data but none of the available results has taken full account of the joint decision on participation and hours and of the non linear shape of the budget constraint that the tax system generates layard et al i980 consider the joint decision in their estimation procedure but ignore the tax system greenhalgh i980 takes into account the non linearity of the budget constraint but estimates labour supply responses by a method which treats participation and hours of work as separate and independent decisions in the present paper on the other hand using an explicit utility index we propose an estimation method which takes into account both the tax system and the joint hours participation decision

a partial adjustment approach to evaluating and measuring the business value of information technology abstract in this paper we develop a partial adjustment approach based on the theory of partial adjustment to assess the value of information technology we also propose a performance measure derived from the approach the constrained structural or implicit and unconstrained non structural or explicit models derived from the approach are fitted into a set of panel data at the country level covering the period from 1993 to 2006 for a sample of 12 countries including the g7 nations and are estimated by the seemingly unrelated regression estimation the results produced by the models are robust with respect to the choice of the production function representing the true desired or maximum output and challenge the widely held belief that the productivity paradox has disappeared and the view that the productivity paradox exists in developing economies only the proposed approach compares favorably with the time varying stochastic production frontier approach since it is easier and simpler to apply but unlike the non parametric data envelopment analysis approach it is parametric

an empirical model of mainframe computer investment this paper introduces a dynamic model of investment decisions in mainframe computer systems i estimate and test the model using detailed micro data from a company in the telecommunications industry the model accounts for technological depreciation which distinguishes computers from other investment goods where physical depreciation is typically a key factor underlying replacement investment decisions the company increased its installed mainframe computer capacity by over 30 fold over the 10 year sample period part of this growth was undoubtedly due to the huge increase in performance and the corresponding drop in the per unit cost of processing capacity of mainframes a consequence of moore s law however there was also tremendous growth in the need for computers for billing account processing and other tasks due to the rapid growth in the telecommunications industry over this same time period i estimate the unknown parameters of the investment model using a nonlinear least squares nested fixed point algorithm nls nfxp which solves the bellman equation underlying the dynamic model of investment and replacement of mainframe computers by nonlinear least squares i demonstrate that it is feasible to estimate this model on an ordinary pc whereas standard discretization approaches to solving the firm s optimal investment policy might not even be feasible using supercomputers i show that the estimated model fits the data very well and accurately captures the large growth in installed mainframe capacity the timing and magnitude of replacement investment as well as periodic upgrades of existing mainframe units i use the model to decompose how much of the 30 fold increase in mainframe computer capacity is due to moore s law i e the huge drop in the unit cost of installed mainframe capacity and how much is due to the growth in demand for services of mainframes due to the rapid growth in demand for telecommunications services particularly cell phone accounts by the firm s customers copyright 2010 john wiley sons ltd

computerisation and wage dispersion an analytical reinterpretation the rich countries have recently seen a dramatic rise in income inequality all the more surprising because the long term trend had been toward equality this paper examines one of the leading explanations computerisation in the workplace i offer a theory of computers impact on white collar work which goes far toward explaining the timing form and locus of recent labour market changes the theory looks at the bureaucratic and organisational applications of computers that have been first largest and most influential they have two effects on firms demand for labour at different skill levels

what happens when agent t gets a computer the labor market impact of cost efficient computer adoption this paper offers a model of how computer technology has changed the labor market demonstrating that wage differentials between computer users and non users are consistent with computers first being introduced in high wage jobs following cost efficiency furthermore skill upgrading occurs following a reemphasis on non routine tasks after adoption the model also reveals that neither differences in computer skills nor complementary skills are needed to explain wage differentials between users and non users skill upgrading and the changing organization and intensity of work finally the predicted effects on the wage structure are consistent with empirical evidence

male female earnings differentials and the role of language in canada ontario and quebec 1970 recent studies by robb 1978 and gunderson 1979a have analysed malefemale earnings differentials in ontario and canada respectively both authors first estimated sex specific earnings functions and then employed the estimated coefficients to decompose the observed or gross earnings differential into a portion attributable to differences in mean characteristics or endowments and a portion attributable to discrimination i discrimination is measured both by differential returns to the same productivity generating characteristics the estimated coefficients of the characteristics and by other forms of discrimination which do not appear explicitly in the earnings equation the estimated intercepts the purpose of this note is to report the results obtained from performing a similar decomposition analysis for quebec and to compare our results with those of robb and gunderson given the comparative nature of our study we have chosen to use the same data base sample characteristics model specifications and control variables as did robb and gunderson 2 the major difference between our study and those of robb and gunderson is the treatment of language robb did not include language variables in her earnings functions for ontario while gunderson employed what we term a narrow definition of language for canada in his earnings equations gunderson measured language skills by the ability to communicate in canada s official

do reits use cash reserves efficiently evidence from corporate acquisitions abstract we examine the combined impact of corporate governance and excess cash holdings on the propensity of firms to become bidders and engage in value destroying acquisitions we focus on the reit market due to its unique characteristics caused by regulation and the nature of the industry the lack of active real estate takeover market should lead to entrenchment and exacerbate agency costs however given the mandatory high cash payout for reits the absence of takeover market should not cause concerns to shareholders our analyses reveal that unlike conventional firms cash rich reits are not more likely to become acquirers and acquisitions by cash rich reits are not value decreasing however similarly to industrial firms reits with higher excess cash and lower insider ownership are more likely to become bidders we interpret our results to be consistent with the hypothesis that agency problems are less severe in real estate and investors are not averse to use of excess cash by reit managers on intra industry acquisitions

the division of labour worker organisation and technological change the model developed in this article explains differences in the division of labour across firms as a result of computer technology adoption changes in the division of labour result from reduced production time and improved communication possibilities the first shifts the division of labour towards generic structures while the latter enhances specialisation our estimates for a sample of dutch establishments in the period 1990 6 suggest that productivity gains have been the main determinant for shifts in the division of labour these productivity gains induced skill upgrading while in firms gaining from improved communication possibilities specialisation increased and skill requirements have fallen the rapid spread of computer technology has led to substantial changes in the division of labour and a shift in the demand for labour in favour of skilled workers mostly these changes have been accompanied by flatter organisational structures larger autonomy for workers or workgroups the application of innovative human resource management practices and so on there are also less typical examples where computerisation is associated with increased specialisation e g the rapid increase of call centres scripting of communication with clients and stricter procedures although the empirical relationship between information and communication technology ict adoption and organisational change has been well documented disagreement remains about the reasons why computerisation provides firms with incentives to change the structure of their organisation and the skill requirements of their workforce

computers and the changing skill intensity of jobs this paper investigates the impact of computer usage at work and other job features on the changing skills required of workers it compare skills utilization in britain at three data points 1986 1992 and 1997 using proxies for the level of skills actually used in jobs this study questions the validity of investigating the facts about and the sources of rising skills by using just educational attainment or occupational grouping data this paper finds that job skills have increased more quickly for women than for men these increases are more extensive than those captured by changes in the occupational class structure the spread of computer usage is very strongly associated with the process of upskilling and accounts in part for narrowing of the gender skills gap expanded use of quality circles is also linked to upskilling evidence for any direct role of trade in inducing skills increases is weak using the qualification held or occupation as a skills measure can lead to erroneous conclusions as to the origin of skills changes

estimating multiple discrete choice models an application to computerization returns buyers in many markets face multiple discrete choices they can purchase multiple units as well as multiple brands at the same time this paper presents a multiple discrete choice model for the analysis of differentiated products demand users maximize profits by choosing the number of units of each brand they purchase i estimate the model using micro level data on the demand for personal computers i use the estimated demand structure to assess the welfare gains from computerization and technological innovation in peripherals the estimated return on investment in personal computers is 92 moreover a 10 increase in the performance to price ratio of microprocessors leads to a 2 2 gain in the estimated user surplus the personal computer pc market is of interest to industrial organization economists because of its size the continual technological change and above all because of the farreaching implications of pcs on the economy as a whole several distinct features make pc demand difficult to model pcs are a differentiated durable good in constant technological evolution moreover buyers make multiple discrete choices firms according to our data spread their purchases of pcs over different brands at the same time they buy pcs in blocks several units of each brand that they have chosen the aim of the paper is to present a model that captures these features and to use this model to estimate the welfare gains from computerization classical discrete choice models allow one choice among mutually exclusive alternatives in contrast the proposed framework allows users to demand multiple units and multiple brands the model can be applied to other cases of multiple discrete choices e g the composition of airline fleets car holdings per household the fields of the faculty in economics departments household cereals consumption or any other good consumed in more than one variety during a relevant time period although pervasive multiple discrete choice problems have received little attention because of their complexity a central issue regarding the pc market is the current controversy in the economics literature about the computerization puzzle this puzzle stems from the empirical finding that computerization has had no effect on firm productivity griliches and siegel 1991 and morrison and berndt 1990 contrary to those results hendel 1994 and lichtenberg 1995 using more disaggregate data than most previous studies report excess returns to computerization this indicates that data aggregation may have created the computerization puzzle in this paper i present a model consistent with the basic

trends in the growth and distribution of skills in the u s workplace 1960 1985 using new measures of job skills and standard measures of education and earnings the authors examine the effects of changing occupational and industry employment patterns on the skill composition of work between 1960 and 1985 the results show a strong upgrading of cognitive and interactive skills combined however with a substantial slowdown in the rates of growth of those skills and a declining demand for motor skills the earnings mix of jobs did not show the same high correlation with employment growth as skill and education levels because high wage low skill jobs declined in the goods industries while low wage jobs requiring at least moderate skill levels grew rapidly in the services

computer usage and labour regulation in india s retail sector abstract a recent survey of 1 948 retail stores in india conducted by the world bank s enterprise surveys shows that 19 per cent of all stores use computers in the state of kerala the figure is as high as 40 per cent using this survey we estimate the effect of computer usage on labour employment our findings show that this effect depends on the stringency of the underlying labour laws stricter labour laws magnify the labour displacing effect of computers significantly

income taxes and the labor supply of married women in quebec in recent years a substantial literature has developed for the most part in the u s concerning labor supply behavior of particular interest is the labor force behavior of married women since this raises a set of interesting theoretical and empirical issues despite the extensive research in both the u s and the u k there has been relatively little empirical investigation in canada this is surprising given the increasing importance of women in the canadian labor force and the concern expressed by policy makers 2 this study presents some empirical results on the labor supply behavior of married women in quebec using data on 2439 husband wife families for 1979 in estimating labor supply responses of married women we take into account the effect of income taxes and address the question of tax perception 3 the impact of taxes on labor supply is particularly important in the quebec context since quebec marginal tax rates are the highest in canada and it appears in north america the study also compares the results of alternative methods of estimation married women s labor supply functions are estimated using standard ols techniques a procedure suggested by heckman 12 13 which corrects for selectivity bias a two stage gls technique which also corrects for selectivity bias and a gls method applied to a system of equations the conceptual framework of labor supply determination is briefly reviewed in section ii section iii describes the data the empirical specification and the estimation strategy

debt and communications technology diffusion retrospective evidence this study has evaluated the relationship between debt in the capital structure of firms and the dynamics of broadband and digital technology adoption in the united states based on a large dataset on local exchange carriers in the united states over a contemporary historical fourteen year period from 1988 to 2001 using treatment effects modeling the impact of debt in impacting the levels of firms broadband deployment has been found to be negative and significant the primary source of debt in the sector has been in the form of arm s length corporate bonds and the assumptions of the monitoring hypothesis associated with such debt that lenders in the face of information and collective actions problems might not be able to control managers and hence invest less in highly technology intensive situations are supported by the data additionally the data set has been split into separate sets for two periods one between 1988 and 1995 for the period before the telecommunications act of 1996 came into force and the other set between 1996 and 2001 and the results have stayed consistent a test of the coefficients between the two periods has shown that the negative impact of leverage on broadband deployment has become stronger after the introduction of competition in the sector and this has suggested that the change in the institutional logics between the two periods has been of material impact in influencing lenders perceptions

a comparison of the labor force behavior of married women in the united states and canada with special attention to the impact of income taxes estimation results are presented for the probability of working the hourly wage rate and the annual hours of work for wives in seven different age groups in both the u s and canada federal and state or provincial taxes are incorporated into the analysis an iterative estimation method is employed to circumvent the statistical problems resulting from the dependence of the hours of work on the tax rate and the dependence of the tax rate on the hours of work authors

globalization trade and income my purpose in this paper is to address two questions that confront our discipline repeatedly these days first what is a useful classification of the symptoms and the determinants of globalization a phase used in a remarkable variety of contexts to economists globalization is generally thought of as the increasing internationalization of the production distribution and marketing of goods and services the term is used less precisely in the popular literature perhaps best exemplified by kenichi ohmae s book the borderless world and when used loosely it invokes a wide variety of political sociological environmental and economic trends that are the concern of media attention almost daily however one defines globalization it is surely a development that is having a profound impact on the subject of economics as a whole and ought to have on the field of international economics in particular my second purpose is to ask how globalization is affecting our profession s view of theory and empirical work in international economics traditional trade theory was concerned with a set of fairly well defined questions regarding the determinants of trade the pattern of trade and the welfare consequences of various trade policy instruments the last two decades and perhaps the last decade in particular has led to a much wider interpretation of what living in an open economy means the change that is occurring on a wide range of economic social scientific and

investigating and comparing the dynamic patterns of the business value of information technology over time abstract the long debated issue of the business value of information technology it to the firm country has received a great deal of attention in the literature but the studies have rarely examined the dynamic patterns of the it value as measured by the firm s productive efficiency over time the objective of this paper is to apply the three factor constant elasticity of substitution ces time varying stochastic production frontier models and use the same data set as used in several previous studies to investigate the dynamic patterns of it value over time in connection with the issues of inputs substitution and complement and the productivity paradox this paper adopts two analytical skills collective and individual to analyze the empirical results collectively we find that the dynamic patterns of it value are closely related to the substitution and complement of three inputs and the it productivity paradox individually we identify five common dynamic patterns of the it value measured by productive efficiency and interpret their implications for the productivity paradox as summarized in a two by two matrix of practical applications and strategies this matrix accounts for four different scenarios of the relationship between the average productive efficiency and the it productivity paradox illustrates some practical applications by the analytical results and provides some business insights and managerial strategies for it decision makers and po is managers this represents a new contribution to the understanding of the dynamic influence of it investments upon the value of it over time

interactive innovation in financial and business services the vanguard of the service revolution abstract the concept of the reverse product cycle as a theoretical model of innovation in services is developed further in this paper using the vanguard sector of financial and business services as a case study example of how innovation operates as an interactive process the parallels between the emerging service revolution and the nineteenth century industrial revolution are explored in order to identify the key characteristics of the vanguard sectors in each technological revolution the particular nature of the new techno economic paradigm based on information technology is then identified leading to a discussion of the unique conjunction of factors favouring financial and business services as the vanguard sector of the service revolution the central part of the paper then offers an elaboration of the reverse product cycle model stressing the interactive nature of the innovation process as it reflects the prevailing technological opportunities market conditions and industry structures within the adopting sector the example of retail banking is used to illustrate how the innovation cycle proceeds from increases in efficiency through improvements in service quality to the generation of new network service products there is then a discussion of the question of the optimal industry structure for innovation suggestion that in the reverse product cycle large corporations are likely to dominate the early stage of incremental process innovations whereas later in the cycle there is an important role for small entrepreneurial firms to advance more radical process and product innovations the concluding section summarises six major characteristics of the service revolution and suggests how it may proceed from its first to its second phase as the focus of innovation shifts from the vanguard sector of financial and business services to a much broader range of higher level knowledge based services many of which are currently delivered by the public sector

technological and organisational change in a process of industrial rejuvenation the case of the italian cotton textile industry the coevolution of technological and organizational change shapes modernization in mature industries only large vertically integrated managerial firms can bear the delays between the adoption of new information technologies and their positive effects on productivity growth a feature of the italian cotton industry is the highly specialized colocalized family owned small firm that is functionally organized it emerged in the 1970s to cope with the introduction of technological changes such as shuttleless looms and open end spinning this structure risks delaying the successful implementation of technological innovations an industrial policy aimed at the adoption of both technological and organizational change could counterbalance the trend toward decline copyright 1998 by oxford university press

the gains to bidding firms from merger abstract this study examines the effect of mergers on the wealth of bidding firms shareholders bidding firms gain significantly during the twenty one days leading to the announcement of each of their first four merger bids these results fail to support the capitalization hypothesis that bidders gains are captured at the beginning of merger programs bidders abnormal returns are positively related to the relative size of the merger partners and the gains during the announcement period are larger for mergers which are successful though the gains are larger prior to 1969 merger bids after 1969 also significantly increase the wealth of bidding firms shareholders the results suggest that the inconclusive findings of the earlier studies may be due to methodological deficiencies the findings of this study are consistent with value maximizing behavior by the management of bidding firms

the welfare cost of unemployment in quebec harberger s triangle meets okun s gap using duality theory under rationing the authors derive a measure of the aggr egate welfare cost of cyclical unemployment which takes into account the value of additional nonmarket activities promoted by unemploymen t this measure is then applied to the quebec economy using benchmar k general equilibrium data for 1980 comparisons are made between the results obtained from the author s welfare measure and from the redu ction in gnp as measured by okun gap according to their simulations the overestimating bias of the cost of cyclical unemployment in que bec as measured by okun gap varies between 3 and 20 percent depend ing on the assumptions used the bias is more important however whe n a permanent increase in the unemployment rate is simulated

productivity effects of organizational change microeconometric evidence this paper analyzes the relationship between investment in information and communication technologies ict non ict investment labor productivity and workplace reorganization firms are assumed to reorganize workplaces if the productivity gains arising from workplace reorganization exceed the associated reorganization costs two different types of organizational change are considered enhancement group work and flattening of hierarchies empirical evidence is provided for a sample of 411 firms from the german business related services sector we develop and estimate a model for labor productivity and firms decision to reorganize workplaces that allows workplace reorganization to affect any parameter of the labor productivity equation our general and flexible methodology allows us to properly take account of strategic complementarities between the input factors and workplace reorganization the estimation results show that changes in human resources practices do not significantly affect firms output elasticities with respect to ict non ict capital and labor although most of the point estimates of the individual output elasticities and of the control variables for observable firm heterogeneity are larger if workplace reorganization is realized we therefore apply the kernel density estimation technique and demonstrate that for firms with organizational change theentire labor productivity distribution shifts significantly out to the right if workplace reorganization takes place indicating that workplace reorganization induces an increase in labor productivity that is attributable to complementarities between the various input factors and workplace reorganization by contrast firms without organizational change would not have realized significant productivity gains if they had reorganized workplaces

globalization outsourcing and wage inequality there is considerable debate over whether international trade has contributed to the declining economic fortunes of less skilled workers one issue that has become lost in the current discussion is how firms respond to import competition and how these responses in turn are transmitted to the labor market in previous work we have argued that outsourcing by which we mean the import of intermediate inputs by domestic firms has contributed to an increase in the relative demand for skilled labor in the united states if firms respond to import competition from low wage countries by moving non skill intensive activities abroad then trade will shift employment towards skilled workers within industries in this paper we extend our previous work by combining new import data from the revised nber trade database with disaggregated data on input purchases from the census of manufactures we construct industry by industry estimates of outsourcing for the period 1972 1990 and reexamine whether outsourcing has contributed to an increase in relative demand for skilled labor our main finding is that outsourcing can account for 31 51 of the increase in the relative demand for skilled labor that occurred in u s manufacturing industries during the 1980s compared to our previous estimate of 15 33 this abstract was borrowed from another version of this item

innovation r d cooperation and labor recruitment evidence from finland this article investigates the role played by one type of firm interaction namely rd rd and labor acquisition appears to be only of limited importance for innovation

is the growing skill premium a purely metropolitan issue abstract this paper documents that virtually all of the growth in the skilled wage premium over the 1980s in the united states was confined to metropolitan areas explanations for the growing skilled premium will therefore need to take location into account

the returns to computer use revisited have pencils changed the wage structure too are the large measured wage differentials for on the job computer use a true return to computer skills or do they just reflect that higher wage workers use computers on their jobs we examine this issue with three large cross sectional surveys from germany first we confirm that the estimated wage differential associated with computer use in germany is very similar to the u s differential second we also measure large differentials for on the job use of calculators telephones pens or pencils or for those who work while sitting down we argue that these findings cast some doubt on the literal interpretation of the computer use wage differential as reflecting true returns to computer use or skill

changes in job security and their causes an empirical analysis for france 1982 2002 abstract in this paper we analyze the changes in the risks of involuntary job loss in france between 1982 and 2002 we find that these risks are higher in the 1990s than they were in the 1980s we develop an econometric analysis to separate the effects of institutional changes from the effects of new technologies our estimates show that the rise in job loss rates is significantly more pronounced in industries that have the largest share of r d workers and the largest rate of new technologies users these findings suggest that technological changes contribute to decreasing the incentive to keep workers for long period of time and to increasing job insecurity

the diffusion of computers and the distribution of wages abstract when the costs are decreasing workers adopt technology at the point where the costs equal the increased productivity output per worker increases immediately while productivity benefits increase only gradually if costs continue to fall as a result workers in computer adopting labor market groups experience an immediate fall in wages due to increased supply on the other hand adopting workers experience wage increases with some delay this model explains why increased computer use does not immediately lead to higher wage inequality more specifically the results of the model are shown to be consistent with the question why within group wage inequality among skilled workers as a result of computer technology adoption in the united states increased in the 1970s while between group wage inequality and within group wage inequality among the unskilled did not start to increase until the 1980s the model also predicts that the more compressed german wage structure leads to a lagged diffusion of computer technology along with smaller changes in wage inequality our empirical analysis suggests that this is consistent with the actual developments in germany since the 1980s finally the theoretical predictions seem to be of the right magnitude to explain the empirical quantities observed in the data

the growing importance of social skills in the labor market the labor market increasingly rewards social skills between 1980 and 2012 jobs requiring high levels of social interaction grew by nearly 12 percentage points as a share of the u s labor force math intensive but less social jobs including many stem occupations shrank by 3 3 percentage points over the same period employment and wage growth were particularly strong for jobs requiring high levels of both math skill and social skills to understand these patterns i develop a model of team production where workers trade tasks to exploit their comparative advantage in the model social skills reduce coordination costs allowing workers to specialize and work together more efficiently the model generates predictions about sorting and the relative returns to skill across occupations which i investigate using data from the nlsy79 and the nlsy97 using a comparable set of skill measures and covariates across survey waves i find that the labor market return to social skills was much greater in the 2000s than in the mid 1980s and 1990s

analyzing the relationships between information technology inputs substitution and national characteristics based on ces stochastic frontier production models abstract this research examines four interrelated issues at the country level the value of information technology it inputs substitution and complement the complementarity phenomenon created by it and national characteristics and the productivity paradox jointly and critically from a global perspective using the so called productive efficiency as the performance measure to that end we develop the three factor constant elasticity of substitution ces stochastic production frontier model and apply it to a set of panel data from 15 countries over the period 1993 2003 along with the traditional two factor ces models within the one and two equation frameworks in the two equation setting six national characteristics are selected as the contributing factors of the productive efficiency the findings include i the value of it as measured by the productive efficiency is duly recognized ii the productivity paradox is found to be absent from the production process in a majority of developed and developing countries considered rejecting the existing argument that the paradox exists only in developing economies but does not exist in developed countries however the developed countries have used it capital in their production systems more productively efficiently than the developing nations iii traditional capital non it capital traditional labor and it capital are not pairwise substitutable contrary to the notion that they are pairwise substitutable at the firm level iv constant returns to scale as commonly assumed are not supported by the data v different national characteristics affect a country s output represented by gross domestic product or gdp and its productive efficiency differently and vi the complementarity phenomenon is observed in most of the countries developed and developing under study

computing productivity firm level evidence we explore the effect of computerization on productivity and output growth using data from 527 large us firms over 1987 1994 we find that computerization makes a contribution to measured productivity and output growth in the short term using one year differences that is consistent with normal returns to computer investments however the productivity and output contributions associated with computerization are up to five times greater over long periods using five to seven year differences the results suggest that the observed contribution of computerization is accompanied by relatively large and time consuming investments in complementary inputs such as organizational capital that may be omitted in conventional calculations of productivity the large long run contribution of computers and their associated complements that we uncover may partially explain the subsequent investment surge in computers in the late 1990s

the structure of technology in a multioutput branch banking firm we formulate and estimate a multioutput bank s cost function amenable for distinguishing between economies of scale and economies of network density we find significant returns to network density especially for smaller banks diseconomies of scale are found for the larger banks whereas the hypothesis of constant returns to scale could not be rejected for the smaller banks