Workplace Coordinated Income Settings Moderate the Effect of Computers on Earnings – But Less so for Highly Paid Employees
DOI:
https://doi.org/10.18753/2297-8224-6959Keywords:
labor unions, firm size, computerization, linked employer-employee data, workplace inequalityAbstract
Linking institutional theories of income setting with computer usages, we study whether income coordination in large firms or through collective agreements moderates the impact of computers on individual earnings. Toward this aim, we analyze linked employer-employee data from the European Structure of Earnings Survey (ESES) for the year 2014 matched to data on occupational computer usages from PIAAC. The results show that, as expected, the average computer premium is lower in large and covered firms, while high-paid workers enjoy higher returns to using computers at work in large and, unexpectedly, covered firms. We conclude by suggesting that higher rewards to computer usage in large and covered firms for those at the high end of the earnings scale may be the result of sorting into high-paid workplaces or flexible pay practices that have become more prevalent also in unionized workplaces.
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