Information Technology, Work Practices, and Wages

We argue that the association between technology and wages is context-dependent and that organization-specific differences may moderate this relationship. To test this possibility, we use micro-level data gathered from over 300 U.S. bank branches and examine empirically the association between information technology (IT) and wages for bank employees. We also test for interaction effects between IT and work practices. Our results suggest that while IT that creates information has a positive main effect on wage levels, interactions between work practices and IT are also significantly related to wages. Accordingly, policy prescriptions that focus on increased skill acquisition and education may be incomplete