The Impact of Information Technology on High-Skilled Labour in Services: Evidence from Firm Level Panel Data

This paper analyses the link between the high-skilled employment share and information technology (IT) in the service production process. Obviously, not all firms employ university graduates. To account for these zero shares, we apply fixed and random effects tobit models. Coefficients are allowed to vary across subsectors. The analysis is based on an unbalanced panel data set for about 900 West German firms over the period 1994-96. The empirical evidence indicates that firms with a higher IT investment output ratio employ a larger fraction of high-skilled workers. However, the size of the IT effect on the skill intensity is rather small.

Falk, Martin and K. Seim (1999), The Impact of Information Technology on High-Skilled Labour in Services: Evidence from Firm Level Panel Data , ZEW Discussion Paper No. 99-58, Mannheim, published in: Economics of Innovation and New Technology.