- 1993-9019 (online)
This series is designed to make available to a wider readership selected studies drawing on the work of the OECD Directorate for Education. Authorship is usually collective, but principal writers are named. The papers are generally available only in their original language (English or French) with a short summary available in the other.
Returns to ICT Skills
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- Oliver Falck1, Alexandra Heimisch1, Simon Wiederhold2
- Author Affiliations
- 1: University of Munich (LMU), Germany
- 2: Ifo Institute for Economic Research,University of Munich, Germany
- 05 May 2016
- Bibliographic information
How important is mastering information and communication technologies (ICT) in modern labour markets? We present the first evidence on this question, drawing on unique data that provide internationally comparable information on ICT skills in 19 countries from the OECD Programme for the International Assessment of Adult Competencies (PIAAC). Our identification strategy relies on the idea that Internet access is important in the formation of ICT skills, and we implement instrumental-variable models that leverage exogenous variation in Internet availability across countries and across German municipalities. ICT skills are substantially rewarded in the labour market: returns are at 8% for a one standard-deviation increase in ICT skills in the international analysis and are almost twice as large in Germany. Placebo estimations show that exogenous Internet availability cannot explain numeracy or literacy skills, suggesting that our identifying variation is independent of a person’s general ability. Our results further suggest that the proliferation of computers complements workers in executing abstract tasks that require ICT skills.
- ICT skills, international comparisons, earnings, broadband
- JEL Classification:
- J31: Labor and Demographic Economics / Wages, Compensation, and Labor Costs / Wage Level and Structure ; Wage Differentials
- K23: Law and Economics / Regulation and Business Law / Regulated Industries and Administrative Law
- L96: Industrial Organization / Industry Studies: Transportation and Utilities / Telecommunications