Computers meet politics at wage structure: an analysis of the computer wage premium across rich countries

Abstract

Abstract This article addresses an important question in the age of rapid spread of new computer technologies: how do institutions influence the computer wage premium? To identify institutional factors that account for differences in computers’ impact on wages, the authors estimate computer wage premiums for 20 countries classified into three national ‘varieties’ of capitalism and distinct forms of industrial relations and education systems. The analyses are based on unique international data from the Survey of Adult Skills, recently conducted by the Organisation for Economic Co-operation and Development. Results reveal that computer use at work is rewarded considerably higher in Liberal countries than in other countries—Nordic Coordinated countries above all. These results signify the centrality of coordinated markets, grounded in strong unions, centralized wage bargaining and publicly funded education and training, for lower computer wage gaps, hence for lower levels of wage inequality.