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Table 4 Returns to ICT skills: instrumental-variable models exploiting technological peculiarities in broadband technology in West Germany.

From: Skills, earnings, and employment: exploring causality in the estimation of returns to skills

Dependent variable: log gross hourly wage
  OLS (municipality level) 2SLS (second stage) OLS
  (1) (2) (3) (4) (5)
ICT skills .136***
(.025)
.148***
(.025)
.272
(.167)
.306***
(.151)
 
Municipality characteristics X X X X X
Individual characteristics   X   X X
First stage
Dependent variable: ICT skills Numeracy skills
Threshold    −.404***
(.102)
−.369***
(.114)
.044
(.054)
Instrument F statistic    15.8 10.5  
Individuals 1849 1849 1849
Municipalities 204 204 204 204 204
  1. Regressions weighted by sampling weights (giving same weight to each municipality). Least squares estimations with variables aggregated at the municipality level in columns (1)–(2); two-stage least squares estimations in columns (3)–(4); least squares estimations in column (5). Sample: West German employees aged 20–65 years, no first-generation immigrants. ICT and numeracy skills are standardized to SD 1 within country. Threshold binary variable indicating whether a municipality is more than 4200 m away from its MDF (1 lower probability of DSL availability), and 0 otherwise. Distance calculations are based on municipalities’ geographic centroid. Municipality characteristics are unemployment rate in 1999 (i.e., share of unemployed individuals in the working-age population aged 18–65 years) and population share of individuals older than 65 in 1999. Individual characteristics are quadratic polynomial in work experience and gender. Column (5) controls for ICT skills. Robust standard errors, adjusted for clustering at the municipality level, in parentheses. Significance levels: * p < 0.10, ** p < 0.05, *** p < 0.01