Technology-induced Wage Premia in Canadian Manufacturing Plants During the 1980s

This study is one of a series that examines how technology adoption affects the skills of workers. Previous papers in the series have approached this issue in differentways with data from a variety of sources. Using data on the strategies and activities of small and medium-sized firms in both manufacturing and services industries,Baldwin and Johnson (1995), Baldwin, Johnson and Pedersen (1996) examine the connection between the different strategies that are pursued by growing firms.Firms that stress technological competencies are found to also place a greater emphasis on skill enhancement and training activities. Using survey data on the type oftechnology used in manufacturing plants and plant managers' perceptions of the skill requirements and training costs associated with the adoption of newtechnologies, Baldwin, Gray and Johnson (1995) find that technology use leads to greater skill requirements, more training, and higher training costs.This paper uses survey data on the incidence of advanced technology adoption and matched panel data on plant characteristics such as wages, capital intensity, andsize to examine the connection between technology use and the wage rates received by workers. Since higher wages are associated with higher skill levels,establishing a connection between technology use and wages reinforces the earlier findings.