Panu Pelkonen

The Wage Effects of Computer Use: Evidence from WERS 2004

Computers and ICT have changed the way we live and work. The latest Workplace Employment Relations Survey (WERS) 2004 provides a snapshot of how using ICT has revolutionized the workplace. Various studies have suggested that the use of a computer at work boosted earnings by as much as 20 per cent. Others suggest this reported impact is due to unobserved heterogeneity. Using excellent data from the WERS employer–employee matched sample, we compare ordinary least squares (OLS) estimates with those from alternative estimation methods and those which include controls for workplace and occupation interactions. We show that OLS estimates overstate the return to computer use but that including occupation and workplace controls, reduces the return to around 3 per cent. We explore the return on different IT skills and find a small return to the use of the ‘office IT function’ and the intensity of computer use as measured by the number of tasks a computer is used for.

Area Disparities in Britain: Understanding the Contribution of People vs. Place Through Variance Decompositions

This article considers methods for decomposing wage variation into individual and group specific components. We discuss the merits of these methods, which are applicable to variance decomposition problems generally. The relative magnitudes of the measures depend on the underlying variances and covariances, and we discuss how to interpret them, and how they might relate to structural parameters of interest. We show that a clear-cut division of variation into area and individual components is impossible. An empirical application to the British labour market demonstrates that labour market area effects contribute very little to the overall variation of wages in Britain.

Agglomeration and Labour Markets: The Impact of Transport Investments on Labour Market Outcomes

One of the possible causes of poorer labour market outcomes for workers in peripheral regions is the small size of cities in these regions. Given this possibility, and the difficulty of affecting city size directly, a frequent policy response has been to invest in transport in order to increase access to markets. In this chapter we investigate how local labour markets respond to these potential transport improvements. We use data on individual workers in the UK to assess how area wages respond to better market access and examine whether this variation is due to a changing composition of the labour market or to higher wages for existing workers. Our results indicate that the increase in wages associated with reductions in transport times stems from changes in the composition of the workforce and that wage increases for local workers with unchanged characteristics are minimal.

Whether to Hire Local Contract Teachers? Trade-Off between Skills and Preferences in India

Whether to hire teachers locally on a contract basis, or via competitive examinations as government officials, is a major policy question in developing countries. We use a Discrete Choice Experiment to assess the job preferences of 700 future elementary school teachers in the state of Uttarakhand in India. The students have been selected using either competitive examination or from a pool of locally hired contract teachers. Skills in English, Arithmetic and Vocabulary are also tested. We find a trade-off between skills and preferences, as students hired using competitive examination have higher skills, but prefer posts in less remote regions.

Preferences and skills of Indian public sector teachers

With a sample of 700 future public sector primary teachers in India, a Discrete Choice Experiment is used to measure job preferences, particularly regarding location. General skills are also tested. Urban origin teachers and women are more averse to remote locations than rural origin teachers and men respectively. Women would require a 26–73 percent increase in salary for moving to a remote location. The results suggest that existing caste and gender quotas can be detrimental for hiring skilled teachers willing to work in remote locations. The most preferred location is home, which supports decentralised hiring, although this could compromise skills.JEL codesI25, J41, J45