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Training and Age-Biased Technical Change
Abstract
Can an ageing labour force sustain rapid technical and organisational changes? This depends on the ability of older workers to adapt their skills through training. Using a matched employer-employee dataset on the French manufacturing sector in the 1990s, we investigate whether training incidence increases in response to technical and organisational changes, and whether this response varies with age. In low-skill occupations, workers older than 50 suffer from reduced training incidence when firms implement advanced information technologies, in sharp contrast with the increased training incidence among workers younger than 50. But training responses are not systematically unfavourable to older workers; in particular, new organisational practices tend to raise training incidence among all groups of workers, regardless of age and occupation. The results hold when controlling for workers’ selection and when using instrumental variables to take into account the endogenous use of new technologies and new organisational practices. These findings confirm that technical change is biased against older low-skilled workers. But they also suggest that older age and a shorter career horizon do not constitute a systematic barrier to training. The difficulties faced by older low-skill workers born in the 1940s may rather be due to the fact that they lack the basic computer literacy that is a prerequisite for training in advanced IT.
... Noda [43] and Gonzales and Niepelt [44] argue that population aging increases the fiscal expenditures of the state for pension security, which has a crowding out effect on technological innovation. An objective disadvantage is that, relative to the young and middle-aged working population, the aging population is less energetic and dynamic in terms of innovation, has a lower learning capacity, and the elderly are less able to absorb new technologies and knowledge, which is not conducive to knowledge dissemination and skills training in firms, and thus is not conducive to the formation of human capital and has a negative impact on innovation [45][46][47]. According to relevant studies in psychology, the cognitive, reasoning, memory, and computational speed abilities of individuals decline significantly after the age of 50 (Nusbaum and Silvia [48]). ...
... For regions with higher human resources, the amount of human capital due to population aging decreases more rapidly, and thus the negative effect on green innovation is greater. This finding supports the view that population aging is detrimental to human capital formation and innovation [46,47]. Fourth, the negative effect of population aging on green innovation decreases as the level of green finance increases, indicating that the increase in the level of green finance is a positive moderating factor, because green finance can help solve problems such as inadequate financing in the green innovation process (Pan et al. [81]). ...
China’s green innovation and green transformation is facing the uncertain challenge of an aging population. Based on provincial panel data from 2006 to 2019 in 30 provinces of China, this paper uses the threshold regression approach to test the green innovation effect of population aging. The following important conclusions are obtained through empirical analysis. First, population aging has a significant inhibiting effect on green innovation. This inhibition has shown an overall downward trend. Second, the green innovation effect of population aging has the characteristic of regional heterogeneity. The negative impact of population aging on green innovation in the western region shows a “U” shaped distribution with the deepening of population aging. The inflection point value of the “U” shape is 18.1%. The inhibitory effect of population aging on green innovation in the central region is higher than that in the eastern and western regions, with the degree of inhibitory effect reaching over 41%. The inhibitory effect of population aging on green innovation in the eastern region has obvious marginal decreasing characteristics. Third, the moderating mechanisms of different regional conditions are different. The green innovation effect of population aging is positive when the level of urbanization exceeds 70% and trade openness exceeds 1.1547. Green finance is also a positive moderator. However, population aging can negatively affect green innovation through environmental regulation and human capital channels. Thus, China should adopt supporting measures for green innovation market cultivation and green industry development, and enhance its green innovation capabilities through channels such as trade opening, urbanization and green finance.
... Furthermore, attitudes towards risk could influence the choice of innovative entrepreneurship, especially in the introduction of new products, as older people tend to be more reluctant to use innovative products (Colovic et al., 2019) and slower to adopt innovative tools (Bertschek and Meyer, 2008). For example, using data from French companies, Behaghel and Greenan (2010) showed that workers over the age of 50 are more reluctant to adapt to new technology. Moreover, the mindset and routines that become established over time leave less room for recognition of entrepreneurial opportunities or creativity, which inhibits the decision to create an innovative firm (Bonte et al., 2009). ...
Purpose
This study investigates the personal factors influencing innovative entrepreneurship combined with additional contextual insights from high-income European countries. Specifically, this study has three main objectives: (i) to measure differences in the level of entrepreneurial innovativeness activity among high-income European regions; (ii) to uncover key factors leading to appropriate levels of entrepreneurial innovativeness and (iii) to suggest policies that may enhance the regional level of entrepreneurial innovation.
Design/methodology/approach
A sample of 4,430 nascent and new entrepreneurs from 16 different high-income European countries drawn from the Global Entrepreneurship Monitor (GEM) Adult Population Survey (APS) was used in conjunction with macroeconomic indicators. Data were analyzed using a logistic regression analysis.
Findings
There are significant differences in the conditions that influence entrepreneurial innovativeness in European regions. These variations in entrepreneurial activity can be explained using contextual factors and individual characteristics. Although technological novelty increases the probability of innovative entrepreneurship, the technology effect is significantly greater in Western Europe than other regions across Europe.
Originality/value
This study illustrates how a contextualized view of entrepreneurship enriches the knowledge of the human and dynamic socioeconomic drivers that motivate innovative entrepreneurial action in high-income European countries.
... Indeed, self-selection into training may also result from some unobservable characteristics. To remove at least partially this bias, following the method developed by Behaghel and Greenan (2010), we introduce as a potential confounder a proxy of unobserved individual productivity, using social security records of the employees' work history (the DADS administrative panel). Starting from 1976, we estimate a wage fixed effect from a Mincerian wage regression. ...
This paper looks at the effect of technological and organisational changes on the probability for workers in the second part of their careers of transmitting their knowledge to other colleagues in their employing firm. We use matched employer-employee data to link changes occurred at the firm level with knowledge transmission behaviours measured at the individual-level. To control for selection bias based on differences in observable characteristics between workers employed in changing work environments and those employed in non-changing ones, we apply propensity score matching techniques. We find that ICT and management changes reduce significantly the probability for workers over 45 of transmitting their knowledge to their colleagues. Then, we analyse the role of training in mitigating this negative impact. To address issues of self-selection into training, we use propensity score matching methods and a proxy for unobservable productivity. We show that participation in a training program regarding ICT tools may help older workers restore their role of knowledge transmitters.
... Fluid cognitive abilities, such as processing speed and reasoning, tend to strongly decline with age (Meyer 2011), but several studies suggests that crystallised abilities, such as verbal fluency and vocabulary size, tend to remain more stable among older workers (Verhaegen and Salthouse 1997; McArdle and Ferrer-Caja 2002; Schaie 2005). And despite the fact the rapid technological shifts have lowered the comparative advantage of seniority as underlined by several studies (Bartel and Sicherman 1993; Ahituv and Zeira 2000; Daveri and Maliranta 2006), seniors lag behind in computer training only when they are low skilled in the first place; as highlighted in a French study (Behaghel and Greenan 2010), their relative performance improves over time (Lallemand and Rycx 2009) and they adapt to technological changes in terms of adjusting their job tasks to the rapidly changing demands also in tasks that were intense in the use of fluid cognitive abilities (Gordo and Skirbekk 2013). ...
Start-ups are increasingly using social media to signal quality and provide information to potential investors. However, the effectiveness of social media on venture capital (VC) financing is likely to be heterogeneous, differing by demographic and network characteristics of the founders. In this paper, we examine whether social media use can improve funding outcomes for firms founded by women and by other people also lacking connections to the investor network, two groups that face greater difficulties in securing VC financing. Using Twitter data and data on VC investment in start-ups from Crunchbase, we explore the interaction effect between Twitter usage and gender and between Twitter usage and the network constraint measure. Overall, we show that social media can mitigate some disparities in financing experienced by these firms through improving information access. We find that this effect is stronger for first-time entrepreneurs than for experienced ones, stronger for attracting new investors than repeat ones, and stronger in more competitive markets. Collectively, these results suggest that social media could primarily help women and less connected individuals obtain financing by alleviating information asymmetry between founders and investors.
This paper was accepted by D. J. Wu, information systems.
Funding: The authors thank Wharton Mack Institute of Innovation Management for funding support.
Supplemental Material: The data files and online appendix are available at https://doi.org/10.1287/mnsc.2023.4728 .
This paper investigates the effects of technological and organizational change (T&O) on jobs and workers. We show that although T&O reduces firm demand for routine relative to abstract task-based jobs, affected workers do not face higher probability of non- employment or lower earnings growth than unaffected workers. Rather, firms that adopt T&O offer routine workers re-training opportunities to upgrade to more abstract jobs. Older workers form an important exception: T&O increases the risk that they permanently withdraw from the labor market and reduces their earnings, regardless of the tasks they performed in the firm prior to T&O.
It is of great practical significance to rationally formulate a development strategy for the sports industry to deeply understand and comprehensively grasp the impact of population aging on the development of the sports industry. To study the impact of population aging on the development of the sports industry, panel data at the provincial level in China from 2014 to 2020 are selected, and a mediation effect model is established to test how the aging of the population affects the development of the sports industry through technological innovation. The results show that technological innovation can explain 59.87% of the impact of population aging on the development of the sports industry without considering the control variables, and the impact of population aging on labor productivity through technological innovation is positive. Under the condition of considering the control variables, technological innovation can explain 56.74% of the impact of population aging on the development of the sports industry, and the impact of population aging on the development of the sports industry through technological innovation is positive. The proportion of the population aged 65 and above in the total population was used as a proxy variable for population aging to test the robustness test, and the impact of technological innovation on the development of the sports industry was positive without considering the control variables. In the robustness test considering the control variables, the impact of technological innovation on the development of the sports industry is positive.
Software represents a major and fast-growing share of firms’ capital investment, impacting demand for labor and what workers do on their jobs. Using U.S. Census Bureau panel data that link firms and workers, this paper estimates the effect of firm software capital on the earnings of workers by age group. We extend the AKM framework to include job-spell fixed effects that account for potential correlation between the worker–firm match and employee age, as well as including time-varying firm effects that allow for a correlation between wage-enhancing productivity shocks and software investments. Within job-spell, capitalized software investment raises worker earnings. However, it does so at a rate that declines after the age of 50, to about zero beyond 65. Our data further show that software capital increases the earnings of high-wage workers relative to low-wage workers and earnings in high-wage firms relative to low-wage firms, thereby widening earnings inequality within and across firms.
The Gini coefficient of labor earnings in Brazil fell by nearly a fifth between 1995 and 2012, from 0.50 to 0.41. The decline in other measures of earnings inequality was even larger, with the 90-10 percentile ratio falling by almost 40 percent. Applying micro-econometric decomposition techniques, this study parses out the proximate determinants of this substantial reduction in earnings inequality. Although a falling education premium did play a role, in line with received wisdom, this study finds that a reduction in the returns to labor market experience was a much more important factor driving lower wage disparities. It accounted for 53 percent of the observed decline in the Gini index during the period. Reductions in horizontal inequalities – the gender, race, regional and urban-rural wage gaps, conditional on human capital and institutional variables – also contributed. Two main factors operated against the decline: a greater disparity in wage premia to different sectors of economic activity, and the “paradox of progress”: the mechanical inequality-increasing effect of a more educated labor force when returns to education are convex.
Using panel data on 172 countries from 1960 to 2019, this paper empirically analyzes the impact of population aging on economic growth and explores the underlying mechanisms. We find that the aging of the population significantly reduces the economic growth rate: when the population over age 65 increases by 1 percentage point, the per capita economic growth rate decreases by 2.6 percentage points. We examine four channels through which population aging may affect economic growth and find that three channels play significant roles: capital accumulation, labor supply, and economic structure, while technological progress and human capital accumulation do not seem to be significant. We also find significant heterogeneity in the impact across countries at different income levels: the effects are statistically significant for middle-income and high-income countries, but not for low-income countries.
In the last 30 years a dramatic change has been observed in the supply and price of skilled labor relative to unskilled labor. The aim of this chapter is to review the recent empirical literature on the changing demand for labor skills, to define the scope and direction of change in labor skills and to explore the reasons of the observed change, especially on the labor skills demanded in knowledge based global economy. Findings on the reasons of skill change are important for the study aims of this book because they lead to results and consequently to implications to be used in the distribution of earnings and employment of the workforce. The empirical research identifies the main reasons of the observed change in skills as the interactions of technological change, organizational change and globalization.
The aim of this chapter is to examine whether company level changes affect differentially the quality of working life according to employees’ age. We use data from a French linked employer-employee survey. The quality of working life is captured through three dimensions: the feeling of fair work recognition, the opportunity to learn new things at work and the feeling of work overload. We find that the impact of changes in the use of ICTs and management tools on the quality of work life of older workers have a less negative impact than expected. Our indicator of fair work recognition is the only one that is found sensitive to
changes, with a lower frequency in changing firms compared with inert ones. This difference is not explained by differences in observable characteristics of older workers employed in the two types of firm. It is rather due to a differing contribution of employment relations and work organisation characteristics in shaping the balance between effort and reward in both contexts.
Cet article étudie la propension à innover des entrepreneurs seniors relativement aux autres catégories d'entrepreneurs. L'étude empirique est réalisée à partir d'une base de données de 69 054 entrepreneurs de 64 pays sur la période 2001-2008 et issue de l'enquête Global Entrepreneurship Monitor. Les résultats montrent que les entrepreneurs seniors sont moins innovants que les entrepreneurs plus jeunes, tant en termes d'innovation de produit que d'innovation de procédé.
The future of production systems is a big concern in Europe and particularly in France where two national initiatives were started in 2012: a specific ministry of productive recovery and a specific scientific reflexion on research on production systems. A one-year work gave the main ideas for what is significantly moving in production systems to make them sustainable for a long time in a European country. It highlighted three main evolutions that would create the industry of the future quite different to the today manufacturing industry: at first, the production systems would be pulled by the development of the technologies with high added value that emerge from today; Then it was considered that the link of the systems of production and the territories would be a heavy trend of future and thus put forward the evolutions of the organization. Finally, it could be the revival of the social contract that would pull the evolution of the systems of production. The paper relates the first conclusions of this national work.
We study the impact of rapid technological change on age and cohort variation in type of work and wages among German men for the 1986–2006 period. Using a task-based approach, we analyze the consequences that technological progress had on changes in the distribution of tasks performed by the men and the relative wages they received. Technological changes implied fewer physically demanding job tasks and a growing use of cognitive skills, particularly tasks where fluid cognitive abilities are important. A number of earlier physiological and cognitive studies suggest that younger workers have a comparative advantage in terms of physically demanding work and fluid cognitive abilities.Our findings confirm that while physical task use has generally decreased for most age groups, workers in their 50s experienced a more rapid growth not only in cognitively intense tasks than those in their 30s, but also in tasks that were intense in the use of fluid cognitive abilities. Following cohorts over time, we find that all cohorts, also when education was controlled for, experienced a rapid increase in fluid task use by the 2000s. Further, the relative earnings of those in their 50s compared to younger age groups increased – possibly as result of a shift towards cognitively based work tasks where age-earnings curves are relatively steep.
This research addresses the contribution that technical skills and cognitive abilities make toward technological efficiency in small and medium enterprises. While most of the literature on skill-biased technological change focuses on large corporations, this exploratory research tries to close the gap in the literature and addresses the impact of technical training, age, and educational level of the workforce on the fit between technological change and organizational innovation in small and medium-sized enterprises. The results suggest that the impact of the workforce structure on efficiency is a function of the level of technological change.
Following the adoption of information and communication technologies (ICT), firms are likely to face increasing skill requirements. They may react either by training or hiring the new skills, or by a combination of both. We first show that ICT are indeed skill biased and we then assess the relative importance of external and internal labour market strategies. We show that skill upgrading following ICT adoption takes place mostly through internal labour markets adjustments. The introduction of ICT is associated with an upward shift in firms’ occupational structure, of which one third is due to hiring and firing workers from and to the external labour market, whereas two-thirds are due to promotions. Moreover, we find no compelling evidence of external labour market strategies based on "excess turnover." In contrast, French firms heavily rely on training in order to upgrade the skill level of their workforce, even if this varies across industries.
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