Workers' Skill Level and InformationTechnology : Evidence from German Service Firms


Falk, Martin ; Seim, Katja


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URL: http://ub-madoc.bib.uni-mannheim.de/637
URN: urn:nbn:de:bsz:180-madoc-6370
Document Type: Working paper
Year of publication: 1999
The title of a journal, publication series: None
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: J23 O33 L8 ,
Subject headings (SWD): Deutschland , Informationstechnik , Humankapital , Dienstleistungssektor
Abstract: This paper analyses the link between human capital and information technology (IT) in the service production process. The analysis is based on 1994 cross-sectional data for 1929 German firms drawn from the first wave of the Mannheim Service Innovation Panel (MIP-S). Factor demand functions are used to analyse the determinants of the firm-specific skill structure. The empirical evidence indicates that firms with a higher IT investment to sales ratio employ a larger fraction of high-skilled workers. The relationship between IT investment and medium-skilled labour is rather weak while the unskilled labourshare is negatively related to the IT investment to sales ratio. Using a translog production function to assess the productivity of different input factors, we find that human and information capital provide the most powerful contributions to output in the service sector.
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