The Relationship of ICT with Human Capital Formation in Rural and Urban Areas of Russia

Abstract

In the article the authors made an attempt to empirically substantiate the link between information and communication technologies and the accumulation of human capital in cities and rural areas of Russia. For that reason the Cobb Douglas model was applied. As a result, four statistically significant models were obtained, where the following two indicators served as the resultant variables: the number of personal computers in organizations per 100 workers and the number of personal computers in organizations with an Internet connection per 100 workers. The explanatory variables were human capital, measured as the average number of years of training per one employed in the region, the average monthly wage in the regions and the share of urban population in the regions. A positive effect of the average level of education on the number of personal computers used in organizations per 100 employees and the number of personal computers in organizations with Internet connection per 100 workers has been proved, and this effect decreases over time. The influence of the average monthly wage is also positive. The assumption has been confirmed that in cities where there is a higher concentration of human capital, higher population density and higher wages, the introduction of information and communication technologies into a production processes in organizations is more intensive than in rural areas. A higher level of wages of the population employed in the region’s economy also acts as an incentive for organizations to use ICT more actively.