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

Oliver Falck, Yuchen Guo, Christina Langer, Valentin Lindlacher and Simon Wiederhold ()

No 27/2024, IWH Discussion Papers from Halle Institute for Economic Research (IWH)

Abstract: Firm 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 firm training mitigates automation risk, we exploit within-occupation and within-industry variation. Additionally, we employ entropy balancing to re-weight workers without firm training based on a rich set of background characteristics, including tested numeracy skills as a proxy for unobserved ability. We find that training reduces workers’ automation risk by 3.8 percentage points, equivalent to 8% of the average automation risk. The training-induced reduction in automation risk accounts for 15% of the wage returns to firm training. Firm training is effective in reducing automation risk and increasing wages across nearly all countries, underscoring the external validity of our findings. Training is similarly effective across gender, age, and education groups, suggesting widely shared benefits rather than gains concentrated in specific demographic segments.

Keywords: automation; entropy balancing; firm training; human capital; on-the-job training; technological change (search for similar items in EconPapers)
JEL-codes: J24 J31 J61 O33 (search for similar items in EconPapers)
Date: 2025, Revised 2025
New Economics Papers: this item is included in nep-hrm, nep-lma and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:iwhdps:308050

DOI: 10.18717/dp6dtn-n251

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