In this paper we investigate the effect of using a home computer on children's development. In most OECD countries 70% or more of the households have a computer at home and children use computers quite extensively, even at very young ages. We use data from the Longitudinal Study of Australian Children (LSAC), which follows an Australian cohort born in 1999/2000. Skills and computer usage information is collected when children are approximately 5 and 7 years old. For cognitive skills, our results indicate that computer time has a positive effect. For non-cognitive skills the evidence is mixed, the effect depending on the score and the age of the children. We test the robustness of our results by comparing OLS, IV and Value Added estimators. Generally, the IV estimates are larger and the Value Added estimates lower than the OLS ones. However the pattern of the results is quite consistent. (Contains 4 figures and 15 tables.)