TY - JOUR AU - Abowd,John M. AU - Haltiwanger,John AU - Lane,Julia AU - McKinney,Kevin L. AU - Sandusky,Kristin TI - Technology and the Demand for Skill:An Analysis of Within and Between Firm Differences JF - National Bureau of Economic Research Working Paper Series VL - No. 13043 PY - 2007 Y2 - April 2007 UR - http://www.nber.org/papers/w13043 L1 - http://www.nber.org/papers/w13043.pdf N1 - Author contact info: John M. Abowd School of Industrial and Labor Relations 261 Ives Hall Cornell University Ithaca, NY 14853 Tel: 607/255-8024 Fax: 866/873-9078 E-Mail: John.Abowd@cornell.edu John C. Haltiwanger Department of Economics University of Maryland College Park, MD 20742 Tel: 301/405-3504 Fax: 301/405-3542 E-Mail: haltiwan@econ.umd.edu Julia Lane American Institutes of Research E-Mail: jlane@air.org Kevin McKinney California Census Research Data Center University of California, Los Angeles 4250 Public Policy Building Los Angeles, CA 90095 Tel: 310-267-5588 Fax: 310-825-8762 E-Mail: kevinm@ccrdc.ucla.edu Kristin Sandusky U.S. Bureau of Census LEHD Program 4700 Silverhill Road Suitland, MD 20233 Tel: (301)763-5292 Fax: (301) 457-8430 E-Mail: lee.k.sandusky@census.gov AB - We estimate the effects of technology investments on the demand for skilled workers using longitudinally integrated employer-employee data from the U.S. Census Bureau's Longitudinal Employer-Household Dynamics Program infrastructure files spanning two Economic Censuses (1992 and 1997). We estimate the distribution of human capital and its observable and unobservable components within each business for each year from 1992 to 1997. We measure technology using variables from the Annual Survey of Manufactures and the Business Expenditures Survey (services, wholesale and retail trade), both administered during the 1992 Economic Census. Static and partial adjustment models are fit. There is a strong positive empirical relationship between advanced technology and skill in a cross-sectional analysis of businesses in both sectors. The more comprehensive measures of skill reveal that advanced technology interacts with each component of skill quite differently: firms that use advanced technology are more likely to use high-ability workers, but less likely to use high-experience workers. These results hold even when we control for unobservable heterogeneity by means of a selection correction and by using a partial adjustment specification. ER -