Ongoing Research
Ongoing Research
Working Papers
No Teens, No Tech: How Shortages of Young Workers Hinder Firm Technology Investments (submitted)
ZEW Working Paper, Link to latest version
Abstract: What drives firm investments in new technologies, a key source of economic growth? I argue that young labor market entrants, i.e.~trainees, are a central determinant because of their low opportunity costs and high returns from acquiring new tech skills. I provide causal evidence for this hypothesis by leveraging a large and exogenous trainee supply shock caused by an education reform in Germany in 2001. Lower trainee supply decreases firm capital investments, in particular in industries undergoing strong technological change, and deteriorates the technical status of firms' machinery, indicating complementarity between new entrants and new technologies. Consistent with the skill-acquisition mechanism, this investment-depressing effect is stronger in firms characterized by high human capital investments in their trainees. These findings dampen hopes of counteracting shortages of young entrants by substituting labor with capital.
The Supply of Expertise: New Technologies, New Skills, and Worker Impacts (submitted)
joint with Anna Salomons and Ulrich Zierahn-Weilage; ZEW Working Paper, MIT Working Paper, Link to latest version
Abstract: Does educational content respond to technological advances, and do such changes enable workers to acquire new relevant expertise? We study how digital technology transforms 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. Technological change spurs curriculum updates, and training content shifts toward digital and social skills while reducing routine-intensive task content, predominantly through new skill emergence. Curriculum updates account for two-thirds of the overall deroutinization in vocational skill supply over this period. Using administrative employer-employee data and a stacked difference-in-differences design, we show that curriculum updates enable workers to adapt to new skill demands: new-skilled workers earn higher wages, with wage increases of up to 5.5\% for technology-exposed occupations. In contrast, the oldest occupational incumbents experience wage declines, indicating skill obsolescence. Firms increase capital investments when exposed to workers with updated skills, consistent with enhanced capital-skill complementarity. These findings highlight the central role of within-occupation skill supply adjustments in meeting evolving labor market demands.
Firm-level Technology Adoption in Times of Crisis
joint with Melanie Arntz, Michael Böhm, Georg Graetz, Terry Gregory and Florian Lehmer; ZEW Working Paper; Revise & Resubmit at European Economic Review
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.
Work in Progress (selected)
Firm Training Standards, joint with Katia Werkmeister
Abstract: Firms underinvest in general skills training because trained workers can be poached. We show that precise training standards, specifying concretely which skills firms must teach, mitigate this market failure. In a simple model, precise standards rule out cheap training, making every firm's workers equally well trained. Hence, firms gain little from poaching, and training pays even for firms that could not otherwise retain their trainees. We study German apprenticeship standards, which have become substantially less precise over time. They are also less precise in occupations with more firm-specific skill needs and greater technological uncertainty, suggesting that regulators trade off the costs and benefits of precision. Exploiting quasi-random variation in precision that arises because regulators copy wording across occupations, we find that less precise standards reduce firms' investment per trainee and erode training participation. Consistent with the poaching mechanism, the drop in participation is driven by firms exposed to poaching and occurs shortly after a standard is revised. Changes in trainee selection also play a role.
What Schools (Don't) Teach: Creative Problem-Solving Skills Versus Factual Knowledge in Primary School Curricula, joint with Katharina Holzheu and Olesia Tsaberiaba
Alumni Networks, First Job Placements, and the College Selectivity Premium, joint with Moritz Seebacher, Katia Werkmeister, and Ludger Woessmann