COMPUTERS HAVE CHANGED THE WAGE STRUCTURE 35 Survey(HSBS),which contains information on achievement test scores and family background,as well as on computer use at work The remainder of the paper is organized as follows.Section I presents a brief descriptive analysis of the workers who use computers at work and details trends in computer utilization in the United States in the 1980s.Section II seeks to answer the question: Are workers who use computers at work paid more as a result of their computer skills?Section III addresses issues of possible omitted variable bias.Section IV analyzes the impact of computer use on other wage differentials.Finally,Section V concludes by speculating on the likely future course of the wage structure in light of the new evidence regarding the payoff to computer use. To preview the main results,I find that workers are rewarded more highly if they use computers at work.Indeed,workers who use a computer earn roughly 10-15 percent higher pay,other things being equal.Additionally,because more highly educated workers are more likely to use computers at work,and because computer use expanded tremendously in the 1980s,computer use can account for a substantial share of the increase in the rate of return to education. I.DESCRIPTIVE ANALYSIS In spite of the widespread belief that computers have funda- mentally altered the work environment,little descriptive informa- tion exists concerning the characteristics of workers who use computers on thejob.Table I summarizes the probability of using a computer at work for several categories of workers in 1984 and 1989.The tabulations are based on October CPS data.These surveys asked respondents whether they have"direct or hands on use of computers"at work.4 Computer use is broadly defined,and includes programming,word processing,E-mail,computer-aided design,etc.For one-quarter of the sample,information on earnings was also collected. Between 1984 and 1989 the percentage of workers who report using a computer at work increased by over 50 percent,from 24.6 to 37.4 percent of the work force.Women,Caucasians,and highly educated workers are more likely to use computers at work than 4.According to the interviewers'instructions,"'Using a computer'refers only to the respondent's 'DIRECT'or 'HANDS ON'use of a computer with typewriter like keyboards."The computer may be a personal computer,minicomputer or mainframe computer.(See CPS Field Representative's Memorandum No.89-20, Section II,October 1989.)COMPUTERS HAVE CHANGED THE WAGE STRUCTURE 35 Survey (HSBS), which contains information on achievement test scores and family background, as well as on computer use at work. The remainder of the paper is organized as follows. Section I presents a brief descriptive analysis of the workers who use computers at work and details trends in computer utilization in the United States in the 1980s. Section I1 seeks to answer the question: Are workers who use computers at work paid more as a result of their computer skills? Section I11 addresses issues of possible omitted variable bias. Section IV analyzes the impact of computer use on other wage differentials. Finally, Section V concludes by speculating on the likely future course of the wage structure in light of the new evidence regarding the payoff to computer use. To preview the main results, I find that workers are rewarded more highly if they use computers at work. Indeed, workers who use a computer earn roughly 10-15 percent higher pay, other things being equal. Additionally, because more highly educated workers are more likely to use computers at work, and because computer use expanded tremendously in the 1980s, computer use can account for a substantial share of the increase in the rate of return to education. In spite of the widespread belief that computers have funda￾mentally altered the work environment, little descriptive informa￾tion exists concerning the characteristics of workers who use computers on the job. Table I summarizes the probability of using a computer at work for several categories of workers in 1984 and 1989. The tabulations are based on October CPS data. These surveys asked respondents whether they have "direct or hands on use of computers" at work.4 Computer use is broadly defined, and includes programming, word processing, E-mail, computer-aided design, etc. For one-quarter of the sample, information on earnings was also collected. Between 1984 and 1989 the percentage of workers who report using a computer at work increased by over 50 percent, from 24.6 to 37.4 percent of the work force. Women, Caucasians, and highly educated workers are more likely to use computers at work than 4. According to the interviewers' instructions, " 'Using a computer' refers only to the respondent's 'DIRECT' or 'HANDS ON' use of a computer with typewriter like keyboards." The computer may be a personal computer, minicomputer or mainframe computer. (See CPS Field Representative's Memorandum No. 89-20, Section 11, October 1989.)