Abstract: Firms in developed countries face increasing shortages of young workers. This paper studies the importance of young workers, particularly vocational trainees, for firm technology investments. Leveraging exogenous variation in trainee supply caused by an education reform in Germany in 2001, I show that a reduction in trainee supply decreases firm technology investments. This suggests complementarity between young workers and new technologies. Consistent with firms' lower opportunity costs and higher returns to training young workers than incumbents, the effect is driven by firms exposed to new tech skills. These findings dampen hopes of counteracting labor shortages by substituting labor with capital.

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show that educational updates help workers adapt to new skill demands, and earn higher wages compared to workers with outdated skills.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: This study investigates how crises affect firms’ adoption of frontier technologies using the Covid-19 pandemic as a case study. The analysis tracks the nature, timing, and pandemic-related motivations of investments among German firms, using longitudinal survey data linked with administrative worker–firm records. We find clear evidence for a shift toward remote work technologies that helped firms mitigate negative employment effects. Overall, however, the pandemic slowed down the diffusion of new technologies. This procyclical pattern of technology adoption is particularly striking since the pandemic created strong incentives to experiment with new technologies.