Labour Income in the Age of Internet Revolution

Heese Carl, Voelzke Jan

Abstract

In the 21st century, the internet has become omnipresent. However, there is little investigation how the dynamics of internet expansion and labour income is connected. The focus of this paper is the relationship between internet access and labour income in Germany. Channels through which the internet affects wages are classified, and groups with positive, negative and ambiguous interdependence are derived. In the estimated model, labour income increases moderately as the response to a positive shock in the size of the internet, while jobs which are identified as "winners" experience the highest short run response and largest average increase in labour income.