Abstract: Firms in developed countries increasingly report shortages of skilled workers. This paper studies how shortages of young workers, particularly trainees, affect firm technology adoption. I exploit exogenous variation in trainee supply induced by an education reform in Germany in 2001. Based on a large firm panel survey and social security records, I show that a reduction in trainee supply decreases firm technology investments. This effect is explained by trainees excelling in learning new tech skills, provoking high capital adjustment costs and, hence, less technology adoption, when trainees are scarce. These findings dampen hopes of counteracting labor shortages by substituting labor with capital.

Abstract: We study how new digital technology reshapes vocational training and skill acquisition and its impact on workers' careers. We construct a novel database of legally binding training curricula and changes therein, 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 curriculum content evolving towards less routine intensive tasks, and greater use of digital and social skills. Using administrative employer-employee data, we show that educational updates help workers adapt to new demands for their expertise, and earn higher wages compared to workers with outdated skills. These findings highlight the role of changes in within-occupational skill supply in meeting evolving labor market demands for non-college educated workers.

Abstract: Using longitudinal survey data on technology use by German firms, matched with administrative worker--firm registers, we assess whether the Covid-19 pandemic accelerated the adoption of cutting-edge technologies. Our data break down technologies by their application and level of sophistication, as well as capturing the timing of investments and whether the pandemic prompted these investments. We do not find evidence for an overall acceleration effect: Cutting-edge investments did not spike, and while they were more common among firms with higher remote work potential, such firms invested at a greater rate even before the pandemic, and also had more ambitious investment plans pre-pandemic. However, we do find that technologies facilitating remote work were adopted at a greater rate due to the pandemic, and these technologies appeared to have helped firms mitigate the negative employment effects of the crisis.