Wages, Employment Structure and Employer Size-Wage Premia: Their Relationship to Advanced-Technology Usage at US Manufacturing Establishments.

A common theme in the labor economics literature is that use of advanced technology in production requires a skilled and educated workforce. Using a new survey of production processes at U.S. manufacturing plants, we ask whether plants that employ advanced technology require a skilled workforce. We find that plants that use the most advanced technology pay the highest wages and employ the greatest fraction of non-production workers (who are generally regarded as more skilled than production workers). The inclusion in standard wage regressions of variables that indicate the use of advanced technology reduces the size-wage premia by as much as 60 percent for some size categories. Copyright 1995 by The London School of Economics and Political Science.