Question

Fifteen years ago, college professors frequently hired undergraduates as research assistants to gather basic information in the library. Today, most professors can get the information themselves using the Internet in less time than it would take to explain what is needed to a research assistant. a. In the labor market for undergraduate research assistants, has the Internet been a substitutable or complementary technological change? b. All else equal, what impact has the development of the Internet likely had on the wage and employment level of undergraduate research assistants? c. Many college professors find that graduate student research assistants are more productive than before because they can use the Internet. All else equal, has the Internet been a substitutable or complementary technological change for graduate student research assistants? What effect would this have on their equilibrium wage and employment level?

Short answer

The Internet has been a substitutable technological change for undergraduate research assistants, likely reducing their wages and employment level. In contrast, the Internet has been a complementary technological change for graduate research assistants, potentially increasing their wages and employment level.

Step-by-step solution

Understanding Substitutable and Complementary Change

First, it is important to understand what substitutable and complementary technological change means in an economic context. A substitutable technological change replaces the need for a certain labor type, reducing demand for that labor. Contrarily, a complementary technological change enhances the productivity of a labor type, thereby increasing the demand for that labor.

Determine the Impact of the Internet on Undergraduate Research Assistants

With respect to undergraduate research assistants, the Internet seems to be a substitutable technological change. This is because, according to the situation presented, professors are now able to find the information themselves using the Internet, and thus don't need the assistance of undergraduate students as much.

Impact on Wage & Employment Level of Undergraduates

Given that the Internet is a substitutable technological change for undergraduate research assistants, it’s likely to lessen the demand for this role. As demand decreases, all other things being equal, the wages of these research assistants would decrease. Consequentially, their employment level might also fall.

Determine the Impact of Internet on Graduate Research Assistants

The case is different for graduate research assistants. Here, the Internet appears to be a complementary technological change as they seem to be more productive than before due to Internet usage. Therefore, it increases the demand for them.

Impact on Wage & Employment Level of Graduates

Since the Internet is a complementary technological change for graduate research assistants, the wage rate for them is likely to increase due to higher demand. With higher wages, the employment level of graduate research assistants might also rise.