Full Citation

Title: Structural transformation and the rise of information technology

Citation Type: Journal Article

Publication Year: 2018

ISBN:

ISSN: 03043932

DOI: 10.1016/j.jmoneco.2018.05.005

NSFID:

PMCID:

PMID:

Abstract: Has the emergence of information technology changed the structure of employment and earnings in the US? We propose a new index of occupation-level IT intensity and document several long-term changes in the occupational landscape over the past decades. Using Census and US KLEMS micro-data, we show that: (i) the bulk of productivity growth after 1950 is concentrated in IT intensive sectors; (ii) the share of workers in IT jobs has expanded significantly, with little or no pause and IT jobs enjoy a large and growing earnings premium, even after controlling for general task requirements (e.g., cognitive, non-routine); and (iii) the rise of the IT intensive employment share is closely associated with declines in the manufacturing employment share. While earnings premia for college-educated and cognitive/non-routine workers have flattened in the aggregate since 2000, we show that they continued growing in IT intensive jobs and that these jobs have played a key role in accounting for the surge of high tech service labor productivity. We also use our IT intensity index to estimate industry-specific elasticities of substitution between IT and non-IT intensive labor, finding values of 1.6 in manufacturing and 1.3 in services. Finally, we revisit a long-standing question about the relationship between technological progress and productivity and provide evidence that occupation-level IT intensity is positively associated with output growth, especially in the services sector.

Url: https://www.sciencedirect.com/science/article/abs/pii/S0304393218301351

Url: https://linkinghub.elsevier.com/retrieve/pii/S0304393218301351

User Submitted?: No

Authors: Gallipoli, Giovanni; Makridis, Christos A.

Periodical (Full): Journal of Monetary Economics

Issue:

Volume: 97

Pages: 91-110

Data Collections: IPUMS USA

Topics: Other

Countries: United States