| In this dissertation I analyze the role of information technology in the economy of the United States through its effects on regional labor productivity. The regional approach permits me to shed some light on the so-called "productivity paradox," the oft-cited finding that investment in information technology appeared to have had no visible effect on aggregate productivity. Information technology is first considered as a special type of capital stock and is separated from traditional capital in a production function framework. A panel analysis of productivity in the U.S. states between 1977 and 1997 shows that information technology is a productive input that may have exhibited excess returns and contributed at least 10% to average yearly growth. Employment in occupations and industries using information technology intensively is then treated as a special type of employment. Spatial concentrations, or agglomerations, of information technology employment are estimated to have increased productivity across counties and states by 5% to 10%. Finally, regression analyses using state Gini coefficients, in 1990, show that information technology is also associated with higher income inequality at the state level, supporting the notions that there is indeed a "digital divide" regionally. |
