Abstract: This paper examines the wage premium to computer use in a developing country: Ecuador. We use different approaches to examine whether the premium is causal. Controlling for an extensive set of observables, we find a wage difference between users and non-users of around 20%. Using first differences, the premium drops and is no longer significant in a specification that includes proxies for workers' computer experience and knowledge. Estimates of the impact of the intensity of computer use are also small and in most cases insignificant. Estimates of the pencil premium are substantial in level specifications, but become insignificant in fixed effect specifications. Taken together, the findings suggest that also in the setting of a developing country the computer premium does not reflect a causal impact of computers on productivity, but should be attributed to unobserved worker and/or job characteristics. Download this paper.