The Distinct Effects of Information Technologies and Communication Technologies on Skill Demand

This paper is the first to study the distinct effects of Information Technologies (IT) and Communication Technologies (CT) on labour, and in particular, on the relative demand for skill. The analysis is conducted on a sample covering the bulk of economic activity in 10 developed countries during 1982--2005. I find that IT capital intensity increased the demand for the high-skilled and low-skilled relative to the medium-skilled, suggesting that these technologies undertake routine cognitive tasks or decrease the demand for non-routine cognitive interactive tasks. CT capital intensity exerted mostly opposite effects: it increased the demand for the higher-skilled relative to the low-skilled, suggesting that these technologies increase the demand for non-routine cognitive interactive tasks. The IT effects also differ from those of automation technologies -- such as industrial robots, 3-D printing machines, and automatic conveyors, which decrease the relative demand for the low-skilled by undertaking routine manual tasks, and from those of data processing and electronic calculating machines, which decrease the relative demand for the high-skilled by undertaking non-routine cognitive analytical tasks. Hence, my analysis highlights the distinction between IT and CT and the further distinction between (more) narrowly-defined technologies as necessary conditions for the better understanding of the effects of ICT on skill demand