Occupational Inequality in Wage Returns to Employer Demand for Types of Information and Communications Technology (ICT) Skills: 1991–2017

Berufliche Ungleichheit in der Entlohnung für die Nachfrage nach verschiedenen Typen von Informationstechnologie(IT)-Kenntnissen: 1991–2017

Abstract

Is employer demand for particular types of ICT skills needed for job performance associated with a wage premium? The claim is that a wage premium is contingent upon whether an ICT skill is a core component of the occupational skill set or a newly introduced (i.e., novel) skill element, thus engendering occupational inequality in wage returns. The study proposes a sophisticated conceptualization and extraction of types of ICT skills. It is the first one to measure employer demand for these skills directly, repeatedly (i.e., annually) and from a long-term perspective. Analyses are based on data from job advertisements taken from the Swiss Job Market Monitor (SJMM), a longitudinal dataset from 1950 onwards of annual representative samples of job vacancies advertised in the press and online that are matched to wage data taken from the Swiss Labor Force Survey (SLFS). Results show that novel ICT skills in occupations do reap a wage return, whereas core ICT skills in occupations do not. This corroborates the assumption that the unequal exposure of occupations to the digital transformation introduces a new dimension of occupational inequality in wage returns that is related to ICT skills.

Zusammenfassung

Ist die Nachfrage von Arbeitgebern nach verschiedenen Typen von IT-Kenntnissen, die für die Berufsausübung benötigt werden, mit erhöhter Entlohnung verbunden? Dies dürfte davon abhängen, ob bestimmte IT-Kenntnisse bereits ein zentraler Bestandteil des beruflichen Qualifikationsbündels sind oder ob sie als ein neues Qualifikationselement erst hinzugekommen sind. Die vorliegende Studie schlägt eine differenzierte Konzeptualisierung von IT-Kenntnissen vor, wobei sie die erste ist, die diese Kenntnisse direkt, in jährlichem Rhythmus und in Langzeitperspektive misst. Für die Analysen werden die Daten des Stellenmarkt-Monitor Schweiz (SMM), ein bis 1950 zurückreichender Datensatz mit jährlichen repräsentativen Stichproben von Stelleninseraten in der Presse und online, mit Lohndaten der Schweizerischen Arbeitskräfteerhebung (SAKE) gepaart. Die Ergebnisse zeigen, dass die in einem Beruf neu eingeführten IT-Kenntnisse mit erhöhter Entlohnung einhergehen, während dies bei IT-Kenntnissen, die integrale Bestandteile des beruflichen Qualifikationsbündels darstellen, nicht der Fall ist. Weil Berufe der digitalen Transformation in ungleichem Maße ausgesetzt sind, entsteht dadurch eine neue, mit IT-Kenntnissen verknüpfte Dimension der beruflichen Ungleichheit in der Entlohnung.

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Notes

  1. 1.

    Some very recent publications use the data of job vacancy postings provided by the private company Burning Glass Technologies; however, they focus on research questions different than the one of interest here (Azar et al. 2019; Deming and Kahn 2018; Hershbein and Kahn 2018).

  2. 2.

    Vacancy counts of the Swiss Job Market Monitor (SJMM) correlate extremely strongly with national survey estimates of employers’ self-reported difficulty in recruiting workers and hence depict employers’ actual personnel needs.

  3. 3.

    The final two categories of the ICT skill typology do not refer to skills for specific ICT tools. Thus, we cannot develop theoretical arguments and hypotheses about potential wage effects. We keep them only as control variables in the multivariate analyses of the wage effects of ICT skills.

  4. 4.

    Analyses for Switzerland based on data of the Swiss Labor Force Survey (SLFS) show that, in 2017, only 1.45% of the labor force participants had their highest occupational training in an ICT occupation and only 3.1% work in an ICT occupation.

  5. 5.

    The proportion of job ads simultaneously requesting this type of ICT skill and an ICT educational credential is very low compared with some other types of ICT skill.

  6. 6.

    The data are available for public use at forsbase.unil.ch.

  7. 7.

    Precision = True Positives / (True Positives + False Positives); Recall = True Positives / (True Positives + False Negatives).

  8. 8.

    The multivariate analysis for the payoff to ICT skills aggregates some of these non-ICT skills so as not to additionally increase the already large number of variables.

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Acknowledgements

This research was supported by a grant from the Swiss National Science Foundation (grant 10FI14_134674). We would also like to thank the editors, Felix Busch, and participants of the RC28 meeting 2018 in Frankfurt and of the ECSR meeting 2019 in Lausanne for helpful comments and suggestions. Many thanks to Jan Müller for skillfully preparing the tables and figures.

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Correspondence to Marlis Buchmann.

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Authors listed in alphabetical order. All authors contributed equally.

Appendix

Appendix



Table 1 Semantic frame of ICT skill requirements with examples
Table 2 Evaluation measures for ICT skill types
Table 3 Descriptives of variables
Table 4 Multilevel model for the payoff to skills for company, industry, and content authoring and editing tools

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Buchmann, M., Buchs, H. & Gnehm, A. Occupational Inequality in Wage Returns to Employer Demand for Types of Information and Communications Technology (ICT) Skills: 1991–2017. Köln Z Soziol (2020). https://doi.org/10.1007/s11577-020-00672-5

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Keywords

  • Skill demand
  • Wage premium
  • Non-ICT occupations
  • Job advertisement
  • Switzerland

Schlüsselwörter

  • Qualifikationsnachfrage
  • Erhöhte Entlohnung
  • Nicht-IT-Berufe
  • Stelleninserate
  • Schweiz