The developed world has seen a dramatic rise in income inequality over the last quarter of a century and one of the leading explanations for this growing dispersion of earnings is computerisation in the workplace. Bresnahan argues that the fall in demand for low and mid skilled labour is a direct result of the systematic substitution of computers for human decision-making.
Computers are good at repetitive tasks - and bureaucracies are full of repetitive tasks.
ICT has also changed the composition of workers' tasks in low skilled areas of bureaucracies. The demand for human social skills, which computers cannot replicate, has risen as cognitive skill demand falls. Yet Bresnahan feels that the extent of ICT's impact on lower skilled occupations is limited, partly due to ICT's inability to replicate the 'people skills' of the front office staff, and partly due to the productivity gains inherent in ICT, which may well have a positive effect on output, and consequently on the demand for labour. At the same time, the use of ICT has raised the demand for highly skilled workers. This mechanism does not work through managers and professionals literally using a computer.