Abstract
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.
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