On the last FKP Seminar on 29 June 2019 hosted by the Centre for Strategic and International Studies (CSIS) in Jakarta, Teguh Yudo Wicaksono (SurveyMeter) presented his research which tries to examine the impact of information and communications technology (ICT) on earnings. The estimation model of this research is based on Modified Mincer Model. The data used on this research is from The Indonesia Family Life Survey (IFLS) wave 4 (2007) & 5 (2014). IFLS is a longitudinal data where the baseline sample is representative of 83 % of the Indonesian population. The sample criteria are an individuals aged 18-55 years old and currently working. However, unpaid family workers were excluded from the sample.

The findings of the research suggest that computer use increases earnings by 9.2 – 11.8%, which persists even after controlling for both worker and firm characteristics. Further, more productive workers go to jobs using computers. The findings also show the impact on sex, which is that women receive 19.2 – 22.1% higher earnings premium from computers. This means technology potentially reduces gender discrimination in labor market. The research also finds that more educated workers earn higher premium. This finding may explain higher wage premiums from education among educated workers in 2000s. Computers (or digital technologies) would change earnings structure which is shows the indication of permanent effect on inequality.

Research about the impact of ICT on earnings has several conclusions. First and foremost is that technology-induced productivity is real. Secondly, computer use at the workplace is related to increased earnings. Thirdly, computer premiums are substantial for women, the educated, and the informal-formal movers (i.e. people who move from informal to formal jobs). Finally, job-transition offers a flexible model which can handle both endogeneity and measurement error and serial correlation.

Download Seminar's Presentation File

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