Adapt or withdraw? Evidence on technological changes and early retirement using matched worker-firm data
AbstractOlder workers typically possess older vintages of skills than younger workers, and they may suffer more from technological change. Experienced workers may nevertheless have accumulated human capital making them suitable for adopting new technologies. On the other hand, to adjust to new technologies, workers must invest in training. This may not be worthwhile for the oldest workers, and technological change may thus induce early retirement. If technological change occurs often, workers will continuously invest in training, which may insulate them from the negative effect of technological change. We exploit the approach by Bartel and Sicherman (1993) to identify this effect by estimating the retirement response to technological change. We examine two hypotheses about the effects of technological changes on early retirement for workers from the age of 50 to the mandatory age of retirement at 67. First, we examine whether workers in firms with higher rates of anticipated technological change retire later than workers in firms with lower rates of technological change. Second, we examine if unanticipated technological change is positively correlated with earlier retirement. We use a matched employer-employee data set with a rich set of controls for worker, firm and local labour market characteristics, and firm level measures of anticipated and not-anticipated technological change. We find a negative correlation between early retirement and anticipated technological change only for the oldest male workers (62 to 66). Further, we find a higher probability of transition to retirement for workers above 60 for firms introducing new process technologies.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Research Department of Statistics Norway in its series Discussion Papers with number 509.
Date of creation: Jul 2007
Date of revision:
Technological changes; early retirement;
This paper has been announced in the following NEP Reports:
- NEP-AGE-2007-07-13 (Economics of Ageing)
- NEP-ALL-2007-07-13 (All new papers)
- NEP-INO-2007-07-13 (Innovation)
- NEP-LAB-2007-07-13 (Labour Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Daron Acemoglu, 2001.
"Directed Technical Change,"
NBER Working Papers
8287, National Bureau of Economic Research, Inc.
- Frank R. Lichtenberg & Donald Siegel, 1991.
"The Impact of R&D Investment On Productivity - New Evidence Using Linked R&D-LRD Data,"
NBER Working Papers
2901, National Bureau of Economic Research, Inc.
- Lichtenberg, Frank R & Siegel, Donald, 1991. "The Impact of R&D Investment on Productivity--New Evidence Using Linked R&D-LRD Data," Economic Inquiry, Western Economic Association International, vol. 29(2), pages 203-29, April.
- Avner Ahituv & Joseph Zeira, 2011.
"Technical Progress and Early Retirement,"
Royal Economic Society, vol. 121(551), pages 171-193, March.
- Ahituv, Avner & Zeira, Joseph, 2000. "Technical Progress and Early Retirement," CEPR Discussion Papers 2614, C.E.P.R. Discussion Papers.
- Avner Ahituv & Joeph Zeira, . "Technical Progress and Early Retirement," Working Papers 0801, University of Crete, Department of Economics.
- Ahituv, Avner & Zeira, Joseph, 2002. "Technical Progress and Early Retirement," Working Paper Series rwp02-007, Harvard University, John F. Kennedy School of Government.
- Rege, Mari & Telle, Kjetil & Votruba, Mark, 2009.
"Social Interaction Effects in Disability Pension Participation: Evidence from Plant Downsizing,"
UiS Working Papers in Economics and Finance
2009/30, University of Stavanger.
- Mari Rege & Kjetil Telle & Mark Votruba, 2012. "Social Interaction Effects in Disability Pension Participation: Evidence from Plant Downsizing," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(4), pages 1208-1239, December.
- Mari Rege & Kjetil Telle & Mark Votruba, 2007. "Social Interaction Effects in Disability Pension Participation. Evidence from Plant Downsizing," Discussion Papers 496, Research Department of Statistics Norway.
- Leora Friedberg, 2001.
"The Impact of Technological Change on Older Workers: Evidence from Data on Computer Use,"
NBER Working Papers
8297, National Bureau of Economic Research, Inc.
- 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.
- Geroski, P A, 1991. "Innovation and the Sectoral," Economic Journal, Royal Economic Society, vol. 101(409), pages 1438-51, November.
- Kjell G. Salvanes & Svein Erik F¯rre, 2003. "Effects on Employment of Trade and Technical Change: Evidence from Norway," Economica, London School of Economics and Political Science, vol. 70(278), pages 293-329, 05.
- Borghans,Lex & Weel,Bas,ter, 2002. "Do Older Workers Have More Trouble Using a Computer Than Younger Workers?," ROA Research Memorandum 003, Maastricht University, Research Centre for Education and the Labour Market (ROA).
- David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1997.
"Computing Inequality: Have Computers Changed the Labor Market?,"
NBER Working Papers
5956, National Bureau of Economic Research, Inc.
- 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.
- David Autor & Lawrence Katz & Alan Krueger, 1997. "Computing Inequality: Have Computers Changed the Labor Market?," Working Papers 756, Princeton University, Department of Economics, Industrial Relations Section..
- Yoram Ben-Porath, 1967. "The Production of Human Capital and the Life Cycle of Earnings," Journal of Political Economy, University of Chicago Press, vol. 75, pages 352.
- Machin, S. & Van Reenen, J., 1997.
"Technology and Changes in Skill Structure: Evidence from Seven OECD Countries,"
24, Centre for Economic Performance & Institute of Economics.
- Stephen Machin & John Van Reenen, 1998. "Technology And Changes In Skill Structure: Evidence From Seven Oecd Countries," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1215-1244, November.
- Stephen Machin & John Van Reenen, 1998. "Technology and changes in skill structure: evidence from seven OECD countries," IFS Working Papers W98/04, Institute for Fiscal Studies.
- Doms, Mark & Dunne, Timothy & Troske, Kenneth R, 1997. "Workers, Wages, and Technology," The Quarterly Journal of Economics, MIT Press, vol. 112(1), pages 253-90, February.
- Julia I. Lane & John C. Haltiwanger & James Spletzer, 1999. "Productivity Differences across Employers: The Roles of Employer Size, Age, and Human Capital," American Economic Review, American Economic Association, vol. 89(2), pages 94-98, May.
- Jonathan Gruber & David A. Wise, 2004.
"Social Security Programs and Retirement around the World: Micro-Estimation,"
National Bureau of Economic Research, Inc, number grub04-1, May.
- Jonathan Gruber & David A. Wise, 2002. "Social Security Programs and Retirement Around the World: Micro Estimation," NBER Working Papers 9407, National Bureau of Economic Research, Inc.
- 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.
- Behaghel, L. & Caroli, E. & Roger, M., 2013.
"Age Biased Technical and Organisational Change, Training and Employment Prospects of Older Workers,"
431, Banque de France.
- Behaghel, Luc & Caroli, Eve & Roger, Muriel, 2011. "Age Biased Technical and Organisational Change, Training and Employment Prospects of Older Workers," IZA Discussion Papers 5544, Institute for the Study of Labor (IZA).
- Roger, Muriel & Caroli, Eve & Behaghel, Luc, 2014. "Age Biased Technical and Organisational Change, Training and Employment Prospects of Older Workers," Economics Papers from University Paris Dauphine 123456789/7243, Paris Dauphine University.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (J Bruusgaard).
If references are entirely missing, you can add them using this form.