Who Pays for Technical Skills? Engineering Brand and High-Tech Wages

We combine two data sources generated through 1) Internet job search and 2) online job reviews to test the hypothesis that employers who provide access to leading-edge information technology (IT) systems are more attractive to IT workers and, in turn, can capture greater value from the wages they pay. We show that much of the utility that workers derive from these investments is due to the long-run value of the skills they acquire by working with new technologies. The results are robust to controlling for other sources of non-wage compensation, such as equity and on-the-job perks that are popular at high-tech companies. Comparisons with workers in other contexts support the notion that these results are unique to IT work. These findings are important because first, they provide evidence of how labor market competition can influence firms’ technology investment decisions; second, because they shed light on factors that influence the development of IT skills; and third, because they point to a potentially important explanation of returns from existing IT productivity estimates.