Opening the Box: Information Technology, Work Practices, and Wages

Abstract

Using 1994–95 survey data on customer service representatives in 303 U.S. bank branches, the authors investigate the effects on wages of information technology (IT), of work practices, and of those two factors in combination. Offline high-involvement practices (measured by the presence of quality circles) were related positively to wages, as was more extensive use of IT that supports sales efforts. Where IT was used more extensively to automate routine processes, wages were lower in branches that did not have high-involvement work practices. The effects are partially explained by higher education requirements and more extensive introductory training in higher-wage jobs.