In periods of accelerating technological change, incumbent workers must steadily update their skills to remain productive. In contrast, young graduates who just entered the labor market often acquired modern skills in school or university. We investigate how incumbent workers’ careers respond to an increasing labor supply of graduates with modern IT skills during a period of accelerating technological change. We identify a supply shock of IT-skilled graduates by exploiting a reform of a mandatory training regulation that obligated all new apprentices in a large German manufacturing occupation to acquire in-depth IT skills. We use a difference-in-differences approach to analyze how this supply shock of IT-skills affected the careers of incumbent workers. The results show that even young incumbents experienced long-lasting earnings losses in form of lower wage growth after the IT-skilled graduates entered the labor market.
Blog Posts in the category Diversity
Blog Posts in the category Diversity
Blog Posts in the category Digitization
