No Teens, No Tech: How Shortages of Young Workers Hinder Firm Technology Investments

Cäcilia Lipowski

No 11471, CESifo Working Paper Series from CESifo

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.

Keywords: endogenous technological change; labor shortages; firm investments; capital adjustment costs; vintage-specific skills (search for similar items in EconPapers)
JEL-codes: D22 D24 J21 J24 O33 (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-ict and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp11471.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_11471

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe (wohlrabe@ifo.de).