Training, Automation, and Wages: International Worker-Level Evidence

Oliver Falck, Yuchen Guo, Christina Langer (), Valentin Lindlacher and Simon Wiederhold ()
Additional contact information
Yuchen Guo: ifo Institute, University of Munich
Christina Langer: Stanford University
Valentin Lindlacher: Dresden University of Technology

No 17503, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Job training is widely regarded as crucial for protecting workers from automation, yet there is a lack of empirical evidence to support this belief. Using internationally harmonized data from over 90,000 workers across 37 industrialized countries, we construct an individual-level measure of automation risk based on tasks performed at work. Our analysis reveals substantial within-occupation variation in automation risk, overlooked by existing occupation-level measures. To assess whether job training mitigates automation risk, we exploit within-occupation and within-industry variation. Additionally, we employ entropy balancing to re-weight workers without job training based on a rich set of background characteristics, including tested numeracy skills as a proxy for unobserved ability. We find that job training reduces workers' automation risk by 4.7 percentage points, equivalent to 10 percent of the average automation risk. The training-induced reduction in automation risk accounts for one-fifth of the wage returns to job training. Job training is effective in reducing automation risk and increasing wages across nearly all countries, underscoring the external validity of our findings. Women tend to benefit more from training than men, with the advantage becoming particularly pronounced at older ages.

Keywords: job training; human capital; automation; technological change; entropy balancing (search for similar items in EconPapers)
JEL-codes: J24 J31 J61 O33 (search for similar items in EconPapers)
Pages: 72 pages
Date: 2024-12
New Economics Papers: this item is included in nep-hrm, nep-lma and nep-tid
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Working Paper: Training, Automation, and Wages: International Worker-Level Evidence (2024)
Working Paper: Training, automation, and wages: International worker-level evidence (2024)
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