Computer Use and Earnings in Britain

Abstract

This paper estimates various models of the effect of computer use on earnings using recent NCDS data. The cross‐section estimates are large and significant while the standard fixed effects estimates are small or insignificant. The panel estimates change considerably once we allow the coefficients to differ across individuals. Conditional on assumptions about when individuals use computers, conventional panel estimates may not identify the crucial parameters and alternative methods are needed. We conclude that there was a substantial premium associated with computer use for some individuals in the UK.

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