Returns to digital skills use, temporary employment, and trade unions in European labour markets

Abstract

This paper investigates the moderating role of institutional factors on returns to ICT skill usage among different groups of workers in eight European labour markets. Using PIAAC data, the paper leverages the segmentation of contractual status, allowing for heterogeneous wage effects among workers holding permanent and temporary contracts. Furthermore, this study considers how gaps in ICT wage premiums mirror the compositional differences in national-specific trade union densities among contractual groups, demonstrating that wage premiums associated with ICT usage are not univocally defined by task content or demand-supply dynamics for specific sectors and occupations. The results highlight different returns between labour market segments according to national-specific trade union densities of temporary and permanent workers, revealing how the consequences of technological change are shaped by institutional cleavages.