Technology, Computers, and Wages : Evidence from a Developing Economy

Increasing returns to schooling and rising inequality are well documented for industrial countries and for some developing countries. The growing demand for skills is associated with recent technological developments. Sakellariou and Patrinos argue that computers in the workplace represent one manifestation of these changes. Research in the United States and industrial countries documents a premium for computer use. But there is recent evidence suggesting that computer skills by themselves do not command a wage premium. The authors review the literature and use data from a survey of higher education graduates in Vietnam. The results support the unobserved heterogeneity explanation for computer wage premiums. They suggest that computers may make the productive workers even more productive. However, given the scarcity of computers in low-income countries, an operational strategy of increasing computer availability and skills would seem to offer considerable hope for increasing the incomes of the poor.This paper - a product of the Education Sector Unit, Latin America and the Caribbean Region - is part of a larger effort in the region to document the determinants of earnings