The Wage Effects of Computer Use: Evidence from WERS 2004

Computers and ICT have changed the way we live and work. The latest Workplace Employment Relations Survey (WERS) 2004 provides a snapshot of how using ICT has revolutionized the workplace. Various studies have suggested that the use of a computer at work boosted earnings by as much as 20 per cent. Others suggest this reported impact is due to unobserved heterogeneity. Using excellent data from the WERS employer–employee matched sample, we compare ordinary least squares (OLS) estimates with those from alternative estimation methods and those which include controls for workplace and occupation interactions. We show that OLS estimates overstate the return to computer use but that including occupation and workplace controls, reduces the return to around 3 per cent. We explore the return on different IT skills and find a small return to the use of the ‘office IT function’ and the intensity of computer use as measured by the number of tasks a computer is used for.