Chasing the Trends: How does IT Knowledge Impact Individuals’ Career Development?

Abstract

With the growing importance of information technology in the world, extensive evidence has shown the pivotal role of IT in businesses at the industry and firm level. However, little is known about the value of “personal IT knowledge acquisition” in individual career development. This paper aims to bridge this gap. Towards this end, we obtained a unique data set covering 1 million randomly selected individuals’ career records between 2000 and 2016 from a leading online employment service company in China. We identified individuals’ IT knowledge in both the generalized and specialized IT domains over time. We then employed extensive econometric analyses to identify the nuanced effects of IT knowledge acquisition on an individual’s career development. In particular, we examined the average effects, time-varying effects, and the moderating effects with three potential bias factors, including home bias, big-city bias, and gender bias indicators. Our empirical results suggest that acquiring specialized IT knowledge would increase an individual’s annual salary, on average, by 2.59%, ceteris paribus. The value of specialized IT knowledge has accelerated since 2010, with annual increases ranging from 5% to over 12%. Further, it is important to acquire the “right” knowledge at the “right” time: there is a significant time-varying effect of different types of specialized IT knowledge over time (e.g., AI and deep learning in recent years). Lastly, we observe that having specialized IT knowledge can help individuals reduce common biases (i.e., home bias, big-city bias, and gender bias) in the labor market. In particular, we observe that the acquisition of specialized IT knowledge would mitigate the salary gaps resulting from the home bias and big-city bias (by 1.11% and 5.92%, respectively). Interestingly, females benefit more from having specialized IT knowledge – it helps reduce gender biases by 12.7%. Our analyses further reveal an interesting trade-off - while having specialized IT knowledge helps workers obtain salary increases, having generalized IT knowledge helps workers extend their tenure with the firm. Our paper offers significant managerial implications for both the individual career development and the policymakers.