Returns to digital skills around the world: Evidence from PIAAC’s Second Cycle (2022-2023)

Maja Rynko , SGH Warsaw School of Economics
Tomasz Drabowicz, University of Lodz, Faculty of Economics and Sociology

Using microdata from the second cycle of the OECD Programme for the International Assessment of Adult Competencies (PIAAC 2022-2023), this paper estimates wage returns to digital skills in selected countries from different parts of the world. Digital skills are measured as the use of ICT skills at work, and their effects are assessed through Mincer-type earnings regressions estimated separately for entry-(25-34), prime-(35-54), and exit-age (55-65) workers, controlling for education, experience, gender, and cognitive skills (i.e., literacy, numeracy, and adaptive problem solving). Results show that ICT use is positively and significantly associated with earnings in most countries, with returns ranging from 3 to 16 per cent – comparable to, and in many cases exceeding, those of formal education. Returns to ICT use persist across the life course, while numeracy remains the strongest cognitive predictor of wages. Cross-country patterns suggest complementarity between ICT use and education returns, but variation in their link with numeracy. These findings highlight digital skills as a distinct form of human capital and a key source of emerging digital inequality.

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 Presented in Session P7. Education, Labor Market, and Economic Issues