Jeff Borland, Joe Hirschberg and Jenny Lye
Abstract
This study examines how computer knowledge affects earnings of individual workers in Australia using a unique data set which provides information on the types and levels of computer skills possessed by those workers. Existing research for the United States and United Kingdom has found that workers who use a computer earn a wage premium; and this finding has been interpreted as evidence of the role of technological change in generating widening earnings differentials between high skill and low skill workers. However, there has also been criticism of the robustness of the relation between computer use and earnings - in particular, it has been suggested that the estimated effect of computer use on earnings is partly proxying for effects of unobservable worker attributes. With detailed information on workers' computer skills a number of new approaches to testing the relation between computer knowledge and earnings can be applied. A variety of evidence is presented which is generally supportive of a direct effect of computer knowledge on earnings of individual workers.