This follow-up study evaluates the robustness of the original CHIP value computation,
initially proposed to anchor the MyCHIPs currency to the global average of one hour of
unskilled work. Recognizing the potential influence of Information and Communication
Technology (ICT) by country, this research integrates ICT analysis into the CHIP
computation method. The study aims to determine the impact of ICT inclusion on the
previously established CHIP value.
The original research presented a novel framework for quantifying the CHIP value,
based on econometric estimates from global data. Given the rapid evolution of ICT and
its uneven distribution across countries, this follow-up study investigates whether the
initial exclusion of ICT analysis may have led to a significant misestimation of the CHIP
value. By incorporating ICT data for the subset of 30 developed economies that has
witnessed the highest penetration of ICT in recent decades, this follow-up study seeks
to provide a more accurate and comprehensive evaluation of the CHIP’s foundational
computation.
Utilizing an extensive novel dataset integrating the EU KLEMS and OECD databases,
and applying more refined econometric techniques that explicitly account for ICT capital
in estimating economies’ production functions and implied labor productivity, the follow-
up study recalculates the CHIP value with the inclusion of ICT factors. The results are
documented in an accompanying spreadsheet, highlighting the revised CHIP values
alongside the original computations for comparative analysis. Additionally, rigorously
documented R-code and supplementary datasets are provided, encapsulating the
methodological approach and computational procedures employed in this analysis.
The study’s findings underscore that the higher wages prevalent in more industrialized
countries, such as the United States, are not significantly influenced by better access to
modern technologies, such as ICT capital. This observation leads to the conclusion that
wage disparities across borders may instead be attributed to factors such as
government regulations, tariffs, and other forms of governmental intervention. The
minimal impact of ICT on the CHIP value adjustment reinforces the notion that
discrepancies in wages are more a result of policy-driven distortions rather than
technological infrastructure disparities. This insight encourages a broader exploration of
economic policies and their effects on wage standards, suggesting that the pursuit of
equitable wage determinations might require addressing these governmental barriers
directly.
To see the supporting documents, click here.