NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Information Technology, Workplace Organization and the Demand for Skilled Labor: Firm-Level Evidence

Timothy F. Bresnahan, Erik Brynjolfsson, Lorin M. Hitt

NBER Working Paper No. 7136
Issued in May 1999
NBER Program(s):   IO   PR

Recently, the relative demand for skilled labor has increased dramatically. We investigate one of the causes, skill-biased technical change. Advances in information technology (IT) are among the most powerful forces bearing on the economy. Employers who use IT often make complementary innovations in their organizations and in the services they offer. Our hypothesis is that these co-inventions by IT users change the mix of skills that employers demand. Specifically, we test the hypothesis that it is a cluster of complementary changes involving IT, workplace organization and services that is the key skill-biased technical change. We examine new firm-level data linking several indicators of IT use, workplace organization, and the demand for skilled labor. In both a short-run factor demand framework and a production function framework, we find evidence for complementarity. IT use is complementary to a new workplace organization which includes broader job responsibilities for line workers, more decentralized decision-making, and more self-managing teams. In turn, both IT and that new organization are complements with worker skill, measured in a variety of ways. Further, the managers in our survey believe that IT increases skill requirements and autonomy among workers in their firms. Taken together, the results highlight the roles of both IT and IT-enabled organizational change as important components of the skill-biased technical change.

download in pdf format
   (238 K)

email paper

This paper is available as PDF (238 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w7136

Published: Timothy F. Bresnahan & Erik Brynjolfsson & Lorin M. Hitt, 2002. "Information Technology, Workplace Organization, And The Demand For Skilled Labor: Firm-Level Evidence," The Quarterly Journal of Economics, MIT Press, vol. 117(1), pages 339-376, February.

Users who downloaded this paper also downloaded these:
Bloom, Garicano, Sadun, and Van Reenen w14975 The distinct effects of Information Technology and Communication Technology on firm organization
Berman, Bound, and Griliches w4255 Changes in the Demand for Skilled Labor within U.S. Manufacturing Industries: Evidence from the Annual Survey of Manufacturing
Black and Lynch w6120 How to Compete: The Impact of Workplace Practices and Information Technology on Productivity
Aral, Brynjolfsson, and Van Alstyne w13172 Information, Technology and Information Worker Productivity: Task Level Evidence
Ichniowski, Shaw, and Prennushi w5333 The Effects of Human Resource Management Practices on Productivity
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us