How Do Workers Adjust When Firms Adopt New Technologies?

58 Pages Posted: 7 Aug 2021

See all articles by Sabrina Genz

Sabrina Genz

Government of the Federal Republic of Germany - Institute for Employment Research (IAB)

Terry Gregory

IZA Institute of Labor Economics; ZEW – Leibniz Centre for European Economic Research

Markus Janser

Government of the Federal Republic of Germany - Institute for Employment Research (IAB)

Florian Lehmer

Government of the Federal Republic of Germany - Institute for Employment Research (IAB)

Britta Matthes

Government of the Federal Republic of Germany - Institute for Employment Research (IAB)

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Abstract

We investigate how workers adjust to firms' investments into new digital technologies, including artificial intelligence, augmented reality, or 3D printing. For this, we collected novel data that links survey information on firms' technology adoption to administrative social security data. We then compare individual outcomes between workers employed at technology adopters relative to non-adopters. Depending on the type of technology, we find evidence for improved employment stability, higher wage growth, and increased cumulative earnings in response to digital technology adoption. These beneficial adjustments seem to be driven by technologies used by service providers rather than manufacturers. However, the adjustments do not occur equally across worker groups: IT-related expert jobs with non-routine analytic tasks benefit most from technological upgrading, coinciding with highly complex job requirements, but not necessarily with more academic skills.

JEL Classification: J23, J31, J62, 033

Suggested Citation

Genz, Sabrina and Gregory, Terry and Janser, Markus and Lehmer, Florian and Matthes, Britta, How Do Workers Adjust When Firms Adopt New Technologies?. IZA Discussion Paper No. 14626, Available at SSRN: https://ssrn.com/abstract=3900888 or http://dx.doi.org/10.2139/ssrn.3900888

Sabrina Genz (Contact Author)

Government of the Federal Republic of Germany - Institute for Employment Research (IAB) ( email )

Regensburger Str. 104
Nuremberg, 90478
Germany

Terry Gregory

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

HOME PAGE: http://https://sites.google.com/view/terrygregory

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
Mannheim, 68161
Germany

HOME PAGE: http://https://sites.google.com/view/terrygregory

Markus Janser

Government of the Federal Republic of Germany - Institute for Employment Research (IAB) ( email )

Regensburger Str. 104
Nuremberg, 90478
Germany

Florian Lehmer

Government of the Federal Republic of Germany - Institute for Employment Research (IAB) ( email )

Regensburger Str. 104
Nuremberg, 90478
Germany

Britta Matthes

Government of the Federal Republic of Germany - Institute for Employment Research (IAB)

Regensburger Str. 104
Nuremberg, 90478
Germany

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