NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Assessing the Productivity of Information Technology Equipment in U.S. Manufacturing Industries

Catherine J. Morrison, Ernst R. Berndt

NBER Working Paper No. 3582
Issued in January 1991
NBER Program(s):   PR

In this paper we report results of an empirical assessment of the cost reducing impacts of recent dramatic increases in stocks of "high-tech" office and information technology equipment (0) using annual data from various two digit US manufacturing industries over the 1952-1986 time period. While there are exceptions, on balance we find that in 1986, estimated marginal benefits of investments in this 0 equipment are less than marginal costs, implying over investment in 0 capital in 1986. The sign of the estimated elasticity of demand for labor with respect to changes in the stock of 0 capital is evenly divided in the fourteen industries, but whether positive or negative, in all industries this elasticity increases in absolute magnitude over time, indicating ever greater impacts of 0 capital on the demand for aggregate labor. Finally, our estimates of the elasticity of technical progress with respect to 0-capital are very small in magnitude implying that increases in o capital have only a small impact on technical progress.

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Document Object Identifier (DOI): 10.3386/w3582

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