Michaels, Guy, Natraj, Ashwini and Van Reenen, John (2014) Has ICT polarized skill demand? Evidence from eleven countries over 25 years. Review of Economics and Statistics, 96 (1). pp. 60-77. ISSN 0034-6535
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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 US, Japan, and nine European countries from 1980–2004, 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.
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