The Internet and Local Wages: A Puzzle-Reference-Cited by-同舟云学术

The Internet and Local Wages: A Puzzle

Published:2012-02-01 Issue:1 Volume:102 Page:556-575
ISSN:0002-8282
Container-title:American Economic Review
language:en
Short-container-title:American Economic Review

Author:

Forman Chris¹,Goldfarb Avi²,Greenstein Shane³

Affiliation:

1. College of Management, Georgia Institute of Technology, 800 West Peachtree Street NW, Atlanta, GA 30308.

2. Rotman School of Management, University of Toronto, 105 St. George Street, Toronto, ON M5S 3E6.

3. Kellogg School of Management, Northwestern University, 2001 Sheridan Road, Evanston, IL 60208.

Abstract

How did the diffusion of the internet affect regional wage inequality? We examine the relationship between business investment in advanced internet technology and local variation in US wage growth between 1995 and 2000. We identify a puzzle. The internet is widespread, but the economic payoffs are not. Advanced internet technology is only associated with substantial wage growth in the 6 percent of counties that were already highly wealthy, educated, and populated and had IT-intensive industry. Advanced internet and wage growth appear unrelated elsewhere. Overall, advanced internet explains over half the difference in wage growth between already well-off counties and all others. JEL: J31, L86, O33, R11, R23

Publisher

American Economic Association

Subject

Economics and Econometrics

Link

https://pubs.aeaweb.org/doi/pdf/10.1257/aer.102.1.556

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