No Kids, No Tech: How Shortages of Young Workers Hinder Firm Technology Adoption

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. Link to latest version

Keeping Up with the Computers: How Vocational Training Responds to New Technology

joint with Anna Salomons and Ulrich Zierahn-Weilage

Abstract: We study how advancing digital technology impacts the occupational training and skill acquisition of vocationally trained workers in Germany, and the labor market consequences of updated training for workers. We construct a novel database of legally binding training curricula descriptions and changes therein, spanning the near universe of vocational training in Germany over five decades. To identify the effect of technological change on educational content, vocational curricula are linked to breakthrough technologies embodied in patents with Natural Language Processing techniques. Updates in vocational training are spurred by technological advances, with curriculum content evolving towards less routine intensive tasks, and higher use of digital technology as well as social skills. Using administrative employer-employee data, we show that educational updates help workers adjust to changing skill demands, leading to improved wage outcomes compared to workers with outdated skills.

Firm-level Technology Adoption in Times of Crisis 

joint with Melanie Arntz, Michael Böhm, Georg Graetz, Terry Gregory and Florian Lehmer

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.