Abstract:
This study examines the effect of ICT on wage premium, by using data from 64 countries during the period 2010–2016. The Fixed Effect Model (FEM) is employed to study the relationship between ICT development and income inequality, by using two dependent variables: the conventional wage premium and wage premiums for ICT-intensive occupation. The main findings are: 1) the wage premium in countries with low levels of ICT development is relatively higher; 2) the development of ICT has a positive relationship with the wage premium; 3) the roles of the three sub-indexes of ICT development are different: ICT access shows a small positive relationship, while ICT use and ICT skills are significantly negative with the wage premium.
However, the results of the split sample provide a different result. The development of ICT has a negative relationship with the wage premium in higher ICT developed countries.
