Working Paper: NBER ID: w25552
Authors: Prasanna Tambe; Xuan Ye; Peter Cappelli
Abstract: We test the hypothesis that IT workers accept a compensating differential to work with emerging IT systems, and that employers that invest in these systems can, in turn, capture greater value from the wages they pay. We show that much of the utility IT workers derive from these systems is from skills acquired on the job. This is principally true for younger workers at employers where skill development is encouraged, and the effects are stronger in thicker markets where workers with newer skills have more outside options. An analysis of the text in online employer reviews supports the notion that IT workers value access to interesting IT systems above most other employer attributes. These findings are important because first, they provide evidence of how worker preferences can influence corporate IT investment decisions; second, because they shed light on factors influencing IT skill development; and third, because they point to a potentially important explanation for returns from IT investments.
Keywords: No keywords provided
JEL Codes: J24; J33; J41; L86
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Use of emerging IT systems (M15) | Higher target wages (J39) |
| Emerging IT systems (M15) | Skills acquired on the job (J24) |
| Skills acquired on the job (J24) | Higher target wages (J39) |
| Younger workers (J29) | Higher likelihood to leave jobs using emerging technologies (J63) |
| Emerging technologies (O30) | Valuing learning and technology over compensation (D46) |
| Investments in emerging IT (L86) | Attract higher-quality technical labor at lower wage cost (J24) |