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 acted as a substitutable technological change for undergraduate research assistants, likely resulting in a decrease in their wage and employment levels. On the other hand, for graduate research assistants, it has acted as a complementary technological change, likely increasing their wage and employment levels.

Step-by-step solution

Definition of terms

Start by understanding the difference between substitutable and complementary in this context. A substitutable technological change is one that replaces labor (in this case research assistants) such as the Internet replacing the need for professors to hire undergraduates to gather basic information. A complementary technological change is one that makes labor more productive, such as graduate assistants using the Internet to improve their productivity.

Analyzing Internet's role for undergraduates

For undergraduate research assistants, the introduction of the Internet has been predominantly a substitutable technological change. This is because most professors who previously hired undergraduate research assistants to gather basic library-based information are able to find this information online, replacing the need for a research assistant.

Impact on wage and employment for undergraduates

Since the Internet has been a substitutable technological change for undergraduate research assistants, it has likely decreased both the wage and employment level of undergraduates in this field, all other things being equal. This is because the demand for their services has declined.

Analyzing Internet's role for graduate students

Contrarily, for graduate student research assistants, the Internet appears to be a complementary technological change. As it increases their productivity, it has likely increased their 'value' from the perspective of employers (professors and colleges).

Impact on wage and employment for graduate students

If the Internet has indeed resulted in a complementary technological change for graduate research assistants, this would likely increase both their equilibrium wage and employment level. This is because the demand for their more productivity-enhanced services would likely have increased.