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The Impact of Technological Change on Older Workers: Evidence from Data on Computers

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  • Friedberg, Leora
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    Abstract

    This paper explores the impact on older workers of new technologies that change skill requirements. Older workers, with older skills and less skills than prime-age workers, will suffer in comparison. Furthermore, if skill acquisition is costly, older workers have less incentive to acquire new skills because they have a shorter time horizon until retirement. Several data sets show that the rate of computer use is surprisingly flat over most ages but declines for the oldest workers. The evolution of computer use suggests that most workers, old or young, learn to use computers as needed, and further that older workers use computers less not because they are old, but because they are nearing retirement. In turn, we might expect older workers who do not use computers to retire sooner. In the Health and Retirement Survey non-computer users were 25% more likely to leave work between 1992 and 1996. Instrumental variables estimates, which aim to control for the impact of retirement plans on computer use, do not yield conclusive results, but they suggest that computer use lowers the retirement probability, especially for 55-59 year olds.

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    Bibliographic Info

    Paper provided by Department of Economics, UC San Diego in its series University of California at San Diego, Economics Working Paper Series with number qt1s97n77x.

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    Date of creation: 01 Jun 1999
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    Handle: RePEc:cdl:ucsdec:qt1s97n77x

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    Keywords: older workers;

    References

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    1. Claudia Goldin & Lawrence F. Katz, 1998. "The Origins Of Technology-Skill Complementarity," The Quarterly Journal of Economics, MIT Press, vol. 113(3), pages 693-732, August.
    2. Claudia Goldin & Robert A. Margo, 1991. "The Great Compression: The Wage Structure in the United States at Mid- Century," NBER Working Papers 3817, National Bureau of Economic Research, Inc.
    3. John E. DiNardo & Jorn-Steffen Pischke, 1996. "The Returns to Computer Use Revisited: Have Pencils Changed the Wage Structure Too?," NBER Working Papers 5606, National Bureau of Economic Research, Inc.
    4. Bartel, Ann P & Lichtenberg, Frank R, 1987. "The Comparative Advantage of Educated Workers in Implementing New Technology," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 1-11, February.
    5. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1998. "Computing Inequality: Have Computers Changed The Labor Market?," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1169-1213, November.
    6. Peracchi, Franco & Welch, Finis, 1995. "How representative are matched cross-sections? Evidence from the Current Population Survey," Journal of Econometrics, Elsevier, vol. 68(1), pages 153-179, July.
    7. Levy, Frank & Murnane, Richard J, 1996. "With What Skills Are Computers a Complement?," American Economic Review, American Economic Association, vol. 86(2), pages 258-62, May.
    8. Bartel, Ann P & Sicherman, Nachum, 1993. "Technological Change and Retirement Decisions of Older Workers," Journal of Labor Economics, University of Chicago Press, vol. 11(1), pages 162-83, January.
    9. Alan B. Krueger, 1991. "How Computers Have Changed the Wage Structure: Evidence From Microdata, 1984-1989," NBER Working Papers 3858, National Bureau of Economic Research, Inc.
    10. Juhn, Chinhui, 1992. "Decline of Male Labor Market Participation: The Role of Declining Market Opportunities," The Quarterly Journal of Economics, MIT Press, vol. 107(1), pages 79-121, February.
    11. George E. Johnson, 1997. "Changes in Earnings Inequality: The Role of Demand Shifts," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 41-54, Spring.
    12. Michael Hurd & Kathleen McGarry, 1993. "The Relationship Between Job Characteristics and Retirement," NBER Working Papers 4558, National Bureau of Economic Research, Inc.
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    Cited by:
    1. Hugo Benitez-Silva, 2001. "A Dynamic Model of Job Search Behavior over the Life Cycle with Empirical Applications," Computing in Economics and Finance 2001 100, Society for Computational Economics.
    2. Jeff Borland, 2000. "Economic Explanations of Earnings Distribution Trends in the International Literature and Application to New Zealand," Treasury Working Paper Series 00/16, New Zealand Treasury.
    3. Hugo Benitez-Silva, 2000. "Micro Determinants of Labor Force Status Among Older Americans," Department of Economics Working Papers 00-07, Stony Brook University, Department of Economics.
    4. Leora Friedberg, 2003. "The impact of technological change on older workers: Evidence from data on computer use," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 56(3), pages 511-529, April.
    5. Weinberg, Bruce A., 2004. "Experience and Technology Adoption," IZA Discussion Papers 1051, Institute for the Study of Labor (IZA).

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