Workers who use computers on the job generally receive higher
wages, suggesting that some workers without computer skills or access
to computer technology may be disadvantaged. On-the-job computer
use is less common in nonmetropolitan (nonmetro) areas than in metro
areas, and wages for nonmetro, or rural, workers are generally lower.
But does lower computer use explain the metro-nonmetro wage gap?
In 1997, on-the-job computer users earned 43 percent more than
other workers in the U.S. However, this wage gap reflects not only
computer use but also differences in worker education and skill
level, occupation and type of industry, and other worker and job
characteristics. After accounting for these differences, a wage
premium of about 11 percent remains associated with on-the-job use
of computers.
On-the-job computer use was significantly more common in metro
areas (52 percent) than in nonmetro areas (40 percent) in 1997.
Still, greater computer use in metro areas combined with higher
wages for computer users accounts for only a small portion of the
overall metro-nonmetro wage gap.
ERS research shows that the wage premium associated with computer
use in nonmetro areas is about 6 percent, less than half the 13-percent
premium in metro areas. Moreover, other measured job or worker characteristics
do little to explain this difference in wage premiums. Rurality
itself appears to dampen returns to worker skills, suggesting lower
employer demand for skills in nonmetro areas. Because of the lower
level of return to computer skills in rural areas, nonmetro workers
who use computers on the job (two-fifths of all nonmetro workers)
appear to lose out on an additional wage premium that they would
receive if employed in metro areas.
As returns to computer use on the job are smaller for rural workers,
improving the computer literacy of rural workers may contribute
only slightly to reducing urban-rural wage inequality. While computer
training may benefit workers in nonmetro areas, those workers may
need to relocate to gain the most employment benefits. Computer
literacy programs may also improve the earnings of some racial and
ethnic minorities, who experience a much larger computer use wage
premium.
With the explosive growth in the economic significance of the Internet
in the late 1990s as well as current efforts to expand broadband
services to rural areas, the potential is great for increases in
the returns to computer skills in rural areas. Clearly, we will
need to revisit the "digital divide."
