TECHNICAL CHANGE AND EARNINGS IN BRITISH ESTABLISHMENTS

Recent empirical studies point to higher wages enjoyed by workers in e nvironments where new technologies are intensively used. An examinatio n of the 1984 and 1990 establishment-based WIRS reveals similar patter ns. This paper argues that endogeneity bias is endemic in these result s. Controlling for this endogeneity bias suggests that the estimated i mpact of new technologies on wages is seriously upward-biased. It is m ore likely that the earnings-technology correlation is driven by the i mpact of higher earnings on technical change rather than vice versa.