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  3. American Economic Journal: Applied Economics
  4. July 2017
  5. A Short-Run View of What Computers Do: Evidence from a UK Tax Incentive

A Short-Run View of What Computers Do: Evidence from a UK Tax Incentive

  • Paul Gaggl
  • Greg C. Wright
American Economic Journal: Applied Economics
vol. 9, no. 3, July 2017
(pp. 262-94)
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Abstract

We study the short-run causal effect of Information and Communication Technology (ICT) adoption on employment and wage distribution. We exploit a natural experiment generated by a tax allowance on ICT investments and find that the primary effect of ICT is to complement nonroutine, cognitive-intensive work. We also find that the ICT investments led to organizational changes that were associated with increased inequality within the firm and we discuss our findings in the context of theories of ICT adoption and wage inequality. We find that tasks-based models of technological change best fit the patterns that we observe.

Citation

Gaggl, Paul, and Greg C. Wright. 2017. "A Short-Run View of What Computers Do: Evidence from a UK Tax Incentive." American Economic Journal: Applied Economics, 9 (3): 262-94. DOI: 10.1257/app.20150411

Additional Materials

JEL Classification

  • D22 Firm Behavior: Empirical Analysis
  • J23 Labor Demand
  • J24 Human Capital; Skills; Occupational Choice; Labor Productivity
  • J31 Wage Level and Structure; Wage Differentials
  • M15 IT Management
  • O33 Technological Change: Choices and Consequences; Diffusion Processes
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