Has ICT Polarized Skill Demand? Evidence from Eleven Countries over Twenty-Five Years

Guy Michaels; Ashwini Natraj; John Van Reenen

doi:10.1162/rest_a_00366

Has ICT Polarized Skill Demand? Evidence from Eleven Countries over Twenty-Five Years

Guy Michaels¹; Ashwini Natraj²; John Van Reenen³

¹ London School of Economics, Centre for Economic Performance, CEPR, and BREAD · ² Centre for Economic Performance and London School of Economics · ³ Centre for Economic Performance, London School of Economics, NBER, and CEPR

The Review of Economics and Statistics 2014 open access

We test the hypothesis that information and communication technologies (ICT) polarize labor markets by increasing demand for the highly educated at the expense of the middle educated, with little effect on low-educated workers. Using data on the United States, Japan, and nine European countries from 1980 to 2004, we find that industries with faster ICT growth shifted demand from middle-educated workers to highly educated workers, consistent with ICT-based polarization. Trade openness is also associated with polarization, but this is not robust to controlling for R&D. Technologies account for up to a quarter of the growth in demand for highly educated workers.

DOI: 10.1162/rest_a_00366
Volume: 96 (1)
Pages: 60-77
Language: en
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