Evaluating impacts of ICT development on wages of workers
Abstract
At the provincial level, there is a research gap in discussing the causality and internal mechanism between ICT development and wages of workers. The study utilizes the province-level balanced panel data over the period 2006–2021 in China, clarifies the impact and internal mechanism of ICT development on wages of workers, and uses the DID method to identify the causality between the two. This study found that there is a positive correlation between ICT development and workers’ wages, and skill level is a mediate transmission channel. Moreover, ICT development has a positive impact on workers’ wages in the central and western regions. Besides, compared to low-wage workers, high-wage workers gain more information dividends. The findings of this study have reference significance for policymakers. First, for the central and western provinces in China, it is necessary to actively develop the ICT industry, cultivate high-tech enterprises, and improve local ICT development levels. Second, we should improve the skill level of workers and enhance their competitive advantage in employment. Third, each province should continue to expand the enrollment scale of higher education institutions, and improve the quality of labor force.
First published online 09 September 2024
Keyword : ICT development, wages, skill level, high-quality employment, China
How to Cite
Shi, Z. (2024). Evaluating impacts of ICT development on wages of workers. Technological and Economic Development of Economy, 1-18. https://doi.org/10.3846/tede.2024.22064
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Acemoglu, D., & Restrepo, P. (2020). Robots and jobs: Evidence from US labor markets. The Journal of Political Economy, 128(6), 2188–2244. https://doi.org/10.1086/705716
Akerman, A., Gaarder, I., & Mogstad, M. (2015). The skill complementarity of broadband internet. The Quarterly Journal of Economics, 130(4), 1781–1824. https://doi.org/10.1093/qje/qjv028
Alekseeva, L., Azar, J., Giné, M., Samila, S., & Taska, B. (2021). The demand for AI skills in the labor market. Labour Economics, 71, Article 102002. https://doi.org/10.1016/j.labeco.2021.102002
Asongu, S. A., & Le Roux, S. (2017). Enhancing ICT for inclusive human development in Sub-Saharan Africa. Technological Forecasting & Social Change, 118, 44–54. https://doi.org/10.1016/j.techfore.2017.01.026
Autor, D. H., & Dorn, D. (2013). The growth of low-skill service jobs and the polarization of the US labor market. The American Economic Review, 103(5), 1553–1597. https://doi.org/10.1257/aer.103.5.1553
Bauer, J. M. (2018). The Internet and income inequality: Socio-economic challenges in a hyperconnected society. Telecommunications Policy, 42(4), 333–343. https://doi.org/10.1016/j.telpol.2017.05.009
Behar, A. (2016). The endogenous skill bias of technical change and wage inequality in developing countries. The Journal of International Trade & Economic Development, 25(8), 1101–1121. https://doi.org/10.1080/09638199.2016.1193887
Biagi, F., & Falk, M. (2017). The impact of ICT and e-commerce on employment in Europe. Journal of Policy Modeling, 39(1), 1–18. https://doi.org/10.1016/j.jpolmod.2016.12.004
Bloom, N., Liang, J., Roberts, J., & Ying, Z. J. (2015). Does working from home work? Evidence from a Chinese experiment. The Quarterly Journal of Economics, 130(1), 165–218. https://doi.org/10.1093/qje/qju032
Bu, W., & Tang, Y. (2023). The effects of broadband internet on employment and wages: Firm-level evidence from China. Journal of Global Information Management, 31(6), 1–19. https://doi.org/10.4018/JGIM.321184
Carrera, E. J., Rombaldoni, R., & Pozzi, R. (2021). Socioeconomic inequalities in Europe. Economic Analysis and Policy, 71, 307–320. https://doi.org/10.1016/j.eap.2021.05.007
Cascales Mira, M. (2021). New model for measuring job quality: Developing an European intrinsic job quality index (EIJQI). Social Indicators Research, 155(2), 625–645. https://doi.org/10.1007/s11205-021-02615-9
Chege, S. M., & Wang, D. (2020). Information technology innovation and its impact on job creation by SMEs in developing countries: An analysis of the literature review. Technology Analysis & Strategic Management, 32(3), 256–271. https://doi.org/10.1080/09537325.2019.1651263
Cortes, P. (2008). The effect of low-skilled immigration on U.S. prices: Evidence from CPI data. The Journal of Political Economy, 116(3), 381–422. https://doi.org/10.1086/589756
Dzator, J., Acheampong, A. O., Appiah-Otoo, I., & Dzator, M. (2023). Leveraging digital technology for development: Does ICT contribute to poverty reduction? Telecommunications Policy, 47(4), Article 102524. https://doi.org/10.1016/j.telpol.2023.102524
Fadinger, H., & Mayr, K. (2014). Skill-biased technological change, unemployment and brain drain. Journal of the European Economic Association, 12(2), 397–431. https://doi.org/10.1111/jeea.12049
Falk, M., & Hagsten, E. (2015). E-commerce trends and impacts across Europe. International Journal of Production Economics, 170, 357–369. https://doi.org/10.1016/j.ijpe.2015.10.003
Falck, O., Heimisch-Roecker, A., & Wiederhold, S. (2021). Returns to ICT skills. Research Policy, 50(7), Article 104064. https://doi.org/10.1016/j.respol.2020.104064
Felten, E. W., Raj, M., & Seamans, R. (2018). A method to link advances in artificial intelligence to occupational abilities. AEA Papers and Proceedings, 108(5), 54–57. https://doi.org/10.1257/pandp.20181021
Forman, C., Goldfarb, A., & Greenstein, S. (2012). The Internet and local wages: A puzzle. The American Economic Review, 102(1), 556–575. https://doi.org/10.1257/aer.102.1.556
Fossen, F. M., & Sorgner, A. (2022). New digital technologies and heterogeneous wage and employment dynamics in the United States: Evidence from individual-level data. Technological Forecasting & Social Change, 175, Article 121381. https://doi.org/10.1016/j.techfore.2021.121381
Goos, M., Manning, A., & Salomons, A. (2014). Explaining job polarization: Routine-biased technological change and offshoring. The American Economic Review, 104(8), 2509–2526. https://doi.org/10.1257/aer.104.8.2509
Herrera, G. P., Constantino, M., Su, J-J., & Naranpanawa, A. (2023). The use of ICTs and income distribution in Brazil: A machine learning explanation using SHAP values. Telecommunications Policy, 47(8), Article 102598. https://doi.org/10.1016/j.telpol.2023.102598
Hunter, L. W., & Lafkas, J. J. (2003). Opening the box: Information technology, work practices, and wages. Industrial & Labor Relations Review, 56(2), 224–243. https://doi.org/10.1177/001979390305600202
Lanzhou University. (2021). Report of employment quality. https://job.lzu.edu.cn/ueditor/upload/file/20221205/1670214035679044910.pdf
Lee, J.-W., Kwak, D. W., & Song, E. (2022). Can older workers stay productive? The role of ICT skills and training. Journal of Asian Economics, 79, Article 101438. https://doi.org/10.1016/j.asieco.2021.101438
Lin, C-C., & Peng, S.-S. (2019). The role of diminishing marginal utility in the ordinal and cardinal utility theories. Australian Economic Papers, 58(3), 233–246. https://doi.org/10.1111/1467-8454.12151
Luo, Q., Hu, H., Feng, D., & He, X. (2022). How does broadband infrastructure promote entrepreneurship in China: Evidence from a quasi-natural experiment. Telecommunications Policy, 46(10), Article 102440. https://doi.org/10.1016/j.telpol.2022.102440
Ma, W., Grafton, R. Q., & Renwick, A. (2020). Smartphone use and income growth in rural China: Empirical results and policy implications. Electronic Commerce Research, 20(4), 713–736. https://doi.org/10.1007/s10660-018-9323-x
Machin, S., & Van Reenen, J. (1998). Technology and changes in skill structure: Evidence from seven OECD countries. The Quarterly Journal of Economics, 113(4), 1215–1244. https://doi.org/10.1162/003355398555883
Majumdar, S. K. (2014). Technology and wages: Why firms invest and what happens. Technology in Society, 39, 44–54. https://doi.org/10.1016/j.techsoc.2014.07.005
Michaels, G., Natraj, A., & Van Reenen, J. (2014). Has ICT polarized skill demand? Evidence from eleven countries over twenty-five years. The Review of Economics and Statistics, 96(1), 60–77. https://doi.org/10.1162/REST_a_00366
Myhill, K., Richards, J., & Sang, K. (2021). Job quality, fair work and gig work: The lived experience of gig workers. The International Journal of Human Resource Management, 32(19), 4110–4135. https://doi.org/10.1080/09585192.2020.1867612
National Bureau of Statistics. (2021). China statistical yearbook. China Statistics Press. https://www.stats.gov.cn/sj/ndsj/2021/indexch.htm
Nie, C., & Wan, J. (2023). How does Internet infrastructure construction affect the urban–rural income gap? Evidence from a quasi-natural experiment in China. Progress in Development Studies, 23(3), 317–337. https://doi.org/10.1177/14649934231173819
Niu, M., Wang, Z., & Zhang, Y. (2022). How information and communication technology drives (routine and non-routine) jobs: Structural path and decomposition analysis for China. Telecommunications Policy, 46(1), Article 102242. https://doi.org/10.1016/j.telpol.2021.102242
Njangang, H., Beleck, A., Tadadjeu, S., & Kamguia, B. (2022). Do ICTs drive wealth inequality? Evidence from a dynamic panel analysis. Telecommunications Policy, 46(2), Article 102246. https://doi.org/10.1016/j.telpol.2021.102246
Nonvide, G. M. A. (2023). Impact of information and communication technologies on agricultural households’ welfare in Benin. Telecommunications Policy, 47(6), Article 102570. https://doi.org/10.1016/j.telpol.2023.102570
Ofori, I. Q., Osei, D. B., & Alagidede, I. P. (2022). Inclusive growth in Sub-Saharan Africa: Exploring the interaction between ICT diffusion, and financial development. Telecommunications Policy, 46(7), Article 102315. https://doi.org/10.1016/j.telpol.2022.102315
Peking University. (2021). Report of employment quality. https://scc.pku.edu.cn/attached/file/2022-10-21/1666337327033_北京大学2021年毕业生就业质量报告.pdf
Preacher, K. J., & Hayes, A. F. (2004). SPSS and SAS procedures for estimating indirect effects in simple mediation models. Behavior Research Methods, 36(4), 717–731. https://doi.org/10.3758/BF03206553
Qiu, L., Zhong, S., & Sun, B. (2021). Blessing or curse? The effect of broadband Internet on China’s inter-city income inequality. Economic Analysis and Policy, 72, 626–650. https://doi.org/10.1016/j.eap.2021.10.013
Rath, B. N., Panda, B., & Akram, V. (2023). Convergence and determinants of ICT development in case of emerging market economies. Telecommunications Policy, 47(2), Article 102464. https://doi.org/10.1016/j.telpol.2022.102464
Richmond, K., & Triplett, R. E. (2018). ICT and income inequality: A cross-national perspective. International Review of Applied Economics, 32(2), 195–214. https://doi.org/10.1080/02692171.2017.1338677
Shahiri, H., & Osman, Z. (2015). Internet job search and labor market outcome. International Economic Journal, 29(1), 161–173. https://doi.org/10.1080/10168737.2014.966739
Shi, Z. (2022). How does ICT use affect job satisfaction? Evidence from China. Applied Economics Letters, 31(9), 863–867. https://doi.org/10.1080/13504851.2022.2154310
Shi, Z. (2023). The impact of regional ICT development on job quality of the employee in China. Telecommunications Policy, 47(6), Article 102567. https://doi.org/10.1016/j.telpol.2023.102567
Taniguchi, H., & Yamada, K. (2022). ICT capital–skill complementarity and wage inequality: Evidence from OECD countries. Labour Economics, 76, Article 102151. https://doi.org/10.1016/j.labeco.2022.102151
Yang, L., Lu, H., Wang, S., & Li, M. (2021). Mobile Internet use and multidimensional poverty: Evidence from a household survey in rural China. Social Indicators Research, 158(3), 1065–1086. https://doi.org/10.1007/s11205-021-02736-1
Zhao, X., Lynch, J. G., & Chen, Q. (2010). Reconsidering Baron and Kenny: Myths and truths about mediation analysis. The Journal of Consumer Research, 37(2), 197–206. https://doi.org/10.1086/651257
Zhou, Q. (2023). Research on the impact of digital economy on rural consumption upgrading: Evidence from China family panel studies. Technological and Economic Development of Economy, 29(5), 1461–1476. https://doi.org/10.3846/tede.2023.19511
Zou, W., Liu, L., & Zhuang, Z. (2009). Skill premium, biased technological change and income differences. China & World Economy, 17(6), 64–87. https://doi.org/10.1111/j.1749-124X.2009.01174.x
Acemoglu, D., & Restrepo, P. (2019). Automation and new tasks: How technology displaces and reinstates labor. The Journal of Economic Perspectives, 33(2), 3–30. https://doi.org/10.1257/jep.33.2.3
Acemoglu, D., & Restrepo, P. (2020). Robots and jobs: Evidence from US labor markets. The Journal of Political Economy, 128(6), 2188–2244. https://doi.org/10.1086/705716
Akerman, A., Gaarder, I., & Mogstad, M. (2015). The skill complementarity of broadband internet. The Quarterly Journal of Economics, 130(4), 1781–1824. https://doi.org/10.1093/qje/qjv028
Alekseeva, L., Azar, J., Giné, M., Samila, S., & Taska, B. (2021). The demand for AI skills in the labor market. Labour Economics, 71, Article 102002. https://doi.org/10.1016/j.labeco.2021.102002
Asongu, S. A., & Le Roux, S. (2017). Enhancing ICT for inclusive human development in Sub-Saharan Africa. Technological Forecasting & Social Change, 118, 44–54. https://doi.org/10.1016/j.techfore.2017.01.026
Autor, D. H., & Dorn, D. (2013). The growth of low-skill service jobs and the polarization of the US labor market. The American Economic Review, 103(5), 1553–1597. https://doi.org/10.1257/aer.103.5.1553
Bauer, J. M. (2018). The Internet and income inequality: Socio-economic challenges in a hyperconnected society. Telecommunications Policy, 42(4), 333–343. https://doi.org/10.1016/j.telpol.2017.05.009
Behar, A. (2016). The endogenous skill bias of technical change and wage inequality in developing countries. The Journal of International Trade & Economic Development, 25(8), 1101–1121. https://doi.org/10.1080/09638199.2016.1193887
Biagi, F., & Falk, M. (2017). The impact of ICT and e-commerce on employment in Europe. Journal of Policy Modeling, 39(1), 1–18. https://doi.org/10.1016/j.jpolmod.2016.12.004
Bloom, N., Liang, J., Roberts, J., & Ying, Z. J. (2015). Does working from home work? Evidence from a Chinese experiment. The Quarterly Journal of Economics, 130(1), 165–218. https://doi.org/10.1093/qje/qju032
Bu, W., & Tang, Y. (2023). The effects of broadband internet on employment and wages: Firm-level evidence from China. Journal of Global Information Management, 31(6), 1–19. https://doi.org/10.4018/JGIM.321184
Carrera, E. J., Rombaldoni, R., & Pozzi, R. (2021). Socioeconomic inequalities in Europe. Economic Analysis and Policy, 71, 307–320. https://doi.org/10.1016/j.eap.2021.05.007
Cascales Mira, M. (2021). New model for measuring job quality: Developing an European intrinsic job quality index (EIJQI). Social Indicators Research, 155(2), 625–645. https://doi.org/10.1007/s11205-021-02615-9
Chege, S. M., & Wang, D. (2020). Information technology innovation and its impact on job creation by SMEs in developing countries: An analysis of the literature review. Technology Analysis & Strategic Management, 32(3), 256–271. https://doi.org/10.1080/09537325.2019.1651263
Cortes, P. (2008). The effect of low-skilled immigration on U.S. prices: Evidence from CPI data. The Journal of Political Economy, 116(3), 381–422. https://doi.org/10.1086/589756
Dzator, J., Acheampong, A. O., Appiah-Otoo, I., & Dzator, M. (2023). Leveraging digital technology for development: Does ICT contribute to poverty reduction? Telecommunications Policy, 47(4), Article 102524. https://doi.org/10.1016/j.telpol.2023.102524
Fadinger, H., & Mayr, K. (2014). Skill-biased technological change, unemployment and brain drain. Journal of the European Economic Association, 12(2), 397–431. https://doi.org/10.1111/jeea.12049
Falk, M., & Hagsten, E. (2015). E-commerce trends and impacts across Europe. International Journal of Production Economics, 170, 357–369. https://doi.org/10.1016/j.ijpe.2015.10.003
Falck, O., Heimisch-Roecker, A., & Wiederhold, S. (2021). Returns to ICT skills. Research Policy, 50(7), Article 104064. https://doi.org/10.1016/j.respol.2020.104064
Felten, E. W., Raj, M., & Seamans, R. (2018). A method to link advances in artificial intelligence to occupational abilities. AEA Papers and Proceedings, 108(5), 54–57. https://doi.org/10.1257/pandp.20181021
Forman, C., Goldfarb, A., & Greenstein, S. (2012). The Internet and local wages: A puzzle. The American Economic Review, 102(1), 556–575. https://doi.org/10.1257/aer.102.1.556
Fossen, F. M., & Sorgner, A. (2022). New digital technologies and heterogeneous wage and employment dynamics in the United States: Evidence from individual-level data. Technological Forecasting & Social Change, 175, Article 121381. https://doi.org/10.1016/j.techfore.2021.121381
Goos, M., Manning, A., & Salomons, A. (2014). Explaining job polarization: Routine-biased technological change and offshoring. The American Economic Review, 104(8), 2509–2526. https://doi.org/10.1257/aer.104.8.2509
Herrera, G. P., Constantino, M., Su, J-J., & Naranpanawa, A. (2023). The use of ICTs and income distribution in Brazil: A machine learning explanation using SHAP values. Telecommunications Policy, 47(8), Article 102598. https://doi.org/10.1016/j.telpol.2023.102598
Hunter, L. W., & Lafkas, J. J. (2003). Opening the box: Information technology, work practices, and wages. Industrial & Labor Relations Review, 56(2), 224–243. https://doi.org/10.1177/001979390305600202
Lanzhou University. (2021). Report of employment quality. https://job.lzu.edu.cn/ueditor/upload/file/20221205/1670214035679044910.pdf
Lee, J.-W., Kwak, D. W., & Song, E. (2022). Can older workers stay productive? The role of ICT skills and training. Journal of Asian Economics, 79, Article 101438. https://doi.org/10.1016/j.asieco.2021.101438
Lin, C-C., & Peng, S.-S. (2019). The role of diminishing marginal utility in the ordinal and cardinal utility theories. Australian Economic Papers, 58(3), 233–246. https://doi.org/10.1111/1467-8454.12151
Luo, Q., Hu, H., Feng, D., & He, X. (2022). How does broadband infrastructure promote entrepreneurship in China: Evidence from a quasi-natural experiment. Telecommunications Policy, 46(10), Article 102440. https://doi.org/10.1016/j.telpol.2022.102440
Ma, W., Grafton, R. Q., & Renwick, A. (2020). Smartphone use and income growth in rural China: Empirical results and policy implications. Electronic Commerce Research, 20(4), 713–736. https://doi.org/10.1007/s10660-018-9323-x
Machin, S., & Van Reenen, J. (1998). Technology and changes in skill structure: Evidence from seven OECD countries. The Quarterly Journal of Economics, 113(4), 1215–1244. https://doi.org/10.1162/003355398555883
Majumdar, S. K. (2014). Technology and wages: Why firms invest and what happens. Technology in Society, 39, 44–54. https://doi.org/10.1016/j.techsoc.2014.07.005
Michaels, G., Natraj, A., & Van Reenen, J. (2014). Has ICT polarized skill demand? Evidence from eleven countries over twenty-five years. The Review of Economics and Statistics, 96(1), 60–77. https://doi.org/10.1162/REST_a_00366
Myhill, K., Richards, J., & Sang, K. (2021). Job quality, fair work and gig work: The lived experience of gig workers. The International Journal of Human Resource Management, 32(19), 4110–4135. https://doi.org/10.1080/09585192.2020.1867612
National Bureau of Statistics. (2021). China statistical yearbook. China Statistics Press. https://www.stats.gov.cn/sj/ndsj/2021/indexch.htm
Nie, C., & Wan, J. (2023). How does Internet infrastructure construction affect the urban–rural income gap? Evidence from a quasi-natural experiment in China. Progress in Development Studies, 23(3), 317–337. https://doi.org/10.1177/14649934231173819
Niu, M., Wang, Z., & Zhang, Y. (2022). How information and communication technology drives (routine and non-routine) jobs: Structural path and decomposition analysis for China. Telecommunications Policy, 46(1), Article 102242. https://doi.org/10.1016/j.telpol.2021.102242
Njangang, H., Beleck, A., Tadadjeu, S., & Kamguia, B. (2022). Do ICTs drive wealth inequality? Evidence from a dynamic panel analysis. Telecommunications Policy, 46(2), Article 102246. https://doi.org/10.1016/j.telpol.2021.102246
Nonvide, G. M. A. (2023). Impact of information and communication technologies on agricultural households’ welfare in Benin. Telecommunications Policy, 47(6), Article 102570. https://doi.org/10.1016/j.telpol.2023.102570
Ofori, I. Q., Osei, D. B., & Alagidede, I. P. (2022). Inclusive growth in Sub-Saharan Africa: Exploring the interaction between ICT diffusion, and financial development. Telecommunications Policy, 46(7), Article 102315. https://doi.org/10.1016/j.telpol.2022.102315
Peking University. (2021). Report of employment quality. https://scc.pku.edu.cn/attached/file/2022-10-21/1666337327033_北京大学2021年毕业生就业质量报告.pdf
Preacher, K. J., & Hayes, A. F. (2004). SPSS and SAS procedures for estimating indirect effects in simple mediation models. Behavior Research Methods, 36(4), 717–731. https://doi.org/10.3758/BF03206553
Qiu, L., Zhong, S., & Sun, B. (2021). Blessing or curse? The effect of broadband Internet on China’s inter-city income inequality. Economic Analysis and Policy, 72, 626–650. https://doi.org/10.1016/j.eap.2021.10.013
Rath, B. N., Panda, B., & Akram, V. (2023). Convergence and determinants of ICT development in case of emerging market economies. Telecommunications Policy, 47(2), Article 102464. https://doi.org/10.1016/j.telpol.2022.102464
Richmond, K., & Triplett, R. E. (2018). ICT and income inequality: A cross-national perspective. International Review of Applied Economics, 32(2), 195–214. https://doi.org/10.1080/02692171.2017.1338677
Shahiri, H., & Osman, Z. (2015). Internet job search and labor market outcome. International Economic Journal, 29(1), 161–173. https://doi.org/10.1080/10168737.2014.966739
Shi, Z. (2022). How does ICT use affect job satisfaction? Evidence from China. Applied Economics Letters, 31(9), 863–867. https://doi.org/10.1080/13504851.2022.2154310
Shi, Z. (2023). The impact of regional ICT development on job quality of the employee in China. Telecommunications Policy, 47(6), Article 102567. https://doi.org/10.1016/j.telpol.2023.102567
Taniguchi, H., & Yamada, K. (2022). ICT capital–skill complementarity and wage inequality: Evidence from OECD countries. Labour Economics, 76, Article 102151. https://doi.org/10.1016/j.labeco.2022.102151
Yang, L., Lu, H., Wang, S., & Li, M. (2021). Mobile Internet use and multidimensional poverty: Evidence from a household survey in rural China. Social Indicators Research, 158(3), 1065–1086. https://doi.org/10.1007/s11205-021-02736-1
Zhao, X., Lynch, J. G., & Chen, Q. (2010). Reconsidering Baron and Kenny: Myths and truths about mediation analysis. The Journal of Consumer Research, 37(2), 197–206. https://doi.org/10.1086/651257
Zhou, Q. (2023). Research on the impact of digital economy on rural consumption upgrading: Evidence from China family panel studies. Technological and Economic Development of Economy, 29(5), 1461–1476. https://doi.org/10.3846/tede.2023.19511
Zou, W., Liu, L., & Zhuang, Z. (2009). Skill premium, biased technological change and income differences. China & World Economy, 17(6), 64–87. https://doi.org/10.1111/j.1749-124X.2009.01174.x