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Advanced Digital Technologies and Investment in Employee Training: Complements or Substitutes?

Giorgio Brunello (), Désirée Rückert, Christoph Weiss and Patricia Wruuck
Additional contact information
Giorgio Brunello: University of Padova
Désirée Rückert: European Investment Bank
Patricia Wruuck: European Investment Bank

No 15936, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Using firm-level data covering the 27 EU countries, the UK and the US, we show that employers tend to reduce investment in training per employee after adopting advanced digital technologies (ADT). We estimate with a control function approach firm-level production functions augmented with two factors, the training stock per employee and digital technology use. We show that ADT use and employee training are substitutes in production, implying that an increase in the former negatively affects the marginal productivity of the latter, and that a decline in the cost of introducing ADT reduces employers' investment in training per employee. These findings point to challenges in realizing high levels of firm-sponsored training for employees in increasingly digital economies.

Keywords: digitization; automation; training; productivity (search for similar items in EconPapers)
JEL-codes: D24 J24 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2023-02
New Economics Papers: this item is included in nep-eff, nep-hrm, nep-knm and nep-lma
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