Wages, Productivity, and Technology: What Have We Learned from Micro Evidence for U.S. Manufacturing?

Abstract

Striking changes in the structure of production, wages, and employment have occurred over the last several decades. The introduction of computers and, more generally, advanced technologies into the workplace is widely viewed as one of the major factors underlying these changes. In particular, the role of advanced technology and computers has been closely linked to the rising inequality of worker wages. One hypothesis is that the introduction of advanced technologies and/or computers has led to a rising demand for skilled workers that, in turn, has led to a rise in the wages of skilled workers relative to unskilled workers. A closely related hypothesis is that the introduction of advanced technologies and/or computers should have also been associated with rising productivity.