U-shaped wage curve and the Internet: The Colombian case

  • Diego A. Martin

Abstract

While there is a broad consensus in the literature that there is a positive correlation
between Internet usage and labor income in the richest countries, this
link has not been proven in the developing world. This paper uses propensity
score matching techniques and household survey data to estimate the effect of
the Internet on wages in Colombia, a country that has experienced a relatively
rapid diffusion of information and communications technology in recent years.
The empirical results confirm that there is a positive and statistically significant
relationship between Internet use and income in this country. Consistent with
evidence gathered on developed countries in previous studies, the empirical
results also suggest that workers in the middle of the skill distribution receive
the lowest wage premium for using the Internet. However, contrary to most
evidence from developed countries, low-skilled workers in Colombia enjoy the
highest wage premium from Internet use, which illustrates the potential for new
technologies to address inequality gaps between occupations.
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How to Cite
Martin, D. (2018). U-shaped wage curve and the Internet: The Colombian case. Estudios de Economía, 45(2), 173-202. Retrieved from https://estudiosdeeconomia.uchile.cl/index.php/EDE/article/view/51344/53730
Section
Articles
Published
2018-10-25