Information technology adoption and its impact on employee compensation

Information technology (IT) is now the preeminent driver of the economic growth and the social changes, and it has completely transformed the way business is conducted. Two fundamental questions faced by researchers are related to IT adoption and the value of IT. I try to explore and contribute to the understanding of these two fundamental questions in this dissertation. There are three essays in my dissertation. The first essay examines the mechanisms through which the use of computers affects wage structure in the U.S. I find that the complementarity between computer use and non-routine tasks is a major factor in computer-use wage premium, and that this premium disappears below a certain level of non-routine tasks. Among different types of computer applications, generic tools complement non-routine tasks in contributing to worker wage premium. I also assess the relationship between computer use and wage in the broad framework of workplace changes. The effects of computer use on wage are moderated by an employee's adaptability as well as interactive and numerical skills. The second essay takes a social perspective in examining how the critical mass and diffusion channels affect household computer adoption. I find that critical mass strongly affects home computer adoption, and diffusions from various channels, such as workplace and school, are significant for computer adoption. More importantly, critical mass and diffusion channels are substitutes to each other in facilitating computer adoption. In addition, the effects of critical mass and channels are stronger on first-time computer purchases than on repeat purchases by earlier adopters. The third essay extends the results from the second essay and examines the adoption of various computer applications and home networking technologies. I find that the effects of critical mass and diffusion channels are different for generic computer applications and specialized computer applications. Multiple computer ownership is an important determinant for the adoption of broadband and wireless networking technology. Further more, for home technology adoption, income is not a major determinant anymore. These findings provide important policy and managerial implications.