ICT Use and Labor: Firm-Level Evidence from Turkey

Abstract

This study analyzes the adoption and use of information communication technolo- gies (ICTs) by rms and their eects on employment and wages. I use a condential data set from Turkey that includes detailed surveys focused on how ICTs and the Internet are used by rms. By using the rich survey data, I create an ICT index sum- marizing ICT adoption and use, along with the skills of the rms, where each category takes into account many applications. The rms with dierent levels of ICTs dier in many characteristics. I use the generalized propensity score matching method in order to compare rms that are similar in many dimensions such as industry, location, invest- ments, prots, trade balance, and output. I nd positive eects of ICTs on employment and wages that are diminishing after a certain level of ICTs. These signicant eects are due to an increase in ICT-generated jobs and not due to an increase in non-ICT jobs in the short-run. The eects on non-ICT employment become signicant a couple years after investments in ICTs. This implies a change in the skill composition of the rms with higher intensity of ICT use, especially in the short run