Abstract: What drives firm investments in new technologies, a key source of economic growth? This paper argues that young labor market entrants are a central determinant, because they have low opportunity costs and high returns from acquiring new skills. I provide empirical evidence for this hypothesis by leveraging a large and exogenous shock to the supply of young entrants caused by an education reform in Germany in 2001. Reduced supply of young entrants decreases firm technology investments, indicating that young entrants complement new technologies. Consistent with the skill-acquisition mechanism, this investment-depressing effect is stronger in firms characterized by high training intensity.

Abstract: Advancing technology changes skill demands: for human expertise to remain valuable in the labor market, skill supply must adjust. We study how new digital technology reshapes vocational training and skill acquisition, and the resulting impacts on workers' careers. We construct a novel database of legally binding training curricula spanning the near universe of vocational training in Germany over five decades, and link curriculum updates to breakthrough technologies using Natural Language Processing techniques. Our findings reveal that technological advances drive training updates, with curricula increasingly incorporating digital and social skills while reducing routine-intensive task content, mostly through new skill emergence. Using administrative employer-employee data, we show that educational updates help workers adapt to new skill demands, and earn higher wages compared to workers with outdated skills. By contrast, older occupational incumbents face declining wages, consistent with skill obsolescence. These worker impacts are accompanied by firms increasing capital investments when exposed to workers with updated skills. Our findings highlight the role of changes in within-occupational skill supply in meeting evolving labor market demands for non-college educated workers.

Abstract: We investigate the diffusion of frontier technologies across German firms before and during the Covid-19 crisis. Our analysis tracks the nature, timing, and pandemic-related motivations behind technology investments, using tailor-made longitudinal survey data linked to administrative worker--firm records. Technologies adopted after the onset of the pandemic increasingly facilitated remote work and mitigated the negative employment effects of the crisis. Overall, however, investments in frontier technologies declined sharply, equivalent to a loss of 1.4 years of pre-pandemic investment activity. This procyclical adoption pattern is particularly striking since the pandemic created clear incentives to experiment with new technologies. Our findings highlight how short-run fluctuations may influence medium-run economic growth through their impact on technology diffusion.