Working Paper

Labor supply and personal computer adoption

Abstract: The positive correlations found between computer use and human capital are often interpreted as evidence that the adoption of computers have raised the relative demand for skilled labor, the widely touted skill-biased technological change hypothesis. However, several models argue the skill-intensity of technology is endogenously determined by the relative supply of skilled labor. We use instruments for the supply of human capital coupled with a rich dataset on computer usage by businesses to show that the supply of human capital is an important determinant of the adoption of personal computers. Our results suggest that great caution must be exercised in placing economic interpretations on the correlations often found between technology and human capital.

Keywords: Labor supply;

Bibliographic Information

Provider: Federal Reserve Bank of San Francisco

Part of Series: Working Paper Series

Publication Date: 2006

Number: 2006-18