New Technologies, Wages, and Worker Selection

We study the effect of new technologies (NT) on wages and employment using a unique panel that matches data on individuals and on their firms. As in the United States, we show that computer users are better paid than nonusers (15%–20% more). But these workers were already better compensated before the introduction of the NTs. Total returns to computer use amount to 2%. Measurement errors do not affect our estimates. Furthermore, computer users are protected from job losses as long as bad business conditions do not last too long. This result holds even after controlling for possible selection biases.