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Are technological change and organizational change biased against older workers? Firm-level evidence

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Author Info
Dag Rønningen () (Statistics Norway)
Abstract

Recent decades have been characterized by rapid technological change. In the same period, early withdrawal from the labor market has increased markedly. One particular question concerns the effects of technological change and organizational change on the labor market participation of workers of different ages. The question posed in this paper is whether technological change and organizational change are biased against age, thereby causing a shift in demand from older to younger workers. We estimate the effects of organizational change and technological change on wage bill shares for five age groups. By using panel data, we control for unobserved firm fixed effects. The results indicate that organizational change raises the wage bill share for workers in their forties but lowers the share for workers in their fifties. The wage bill shares of the youngest and oldest workers are hardly affected by organizational change and technological change. Separate estimates for men and women yield qualitatively similar results. In regressions for different educational levels, wage bill shares are positively affected by organizational change for highly educated individuals in their thirties. Technological change increases the wage bill share of highly educated workers in their sixties. For workers with intermediate and lower levels of education, the results are similar to those obtained from the whole sample.

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Paper provided by Research Department of Statistics Norway in its series Discussion Papers with number 512.

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Date of creation: Aug 2007
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Handle: RePEc:ssb:dispap:512

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Related research
Keywords: technological change organizational change age-biased labor demand

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Find related papers by JEL classification:
J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes

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References listed on IDEAS
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  4. Borghans,Lex & Weel,Bas,ter, 2002. "Do Older Workers Have More Trouble Using a Computer Than Younger Workers?," Research Memoranda 003, Maastricht : ROA, Researchcentrum voor Onderwijs en Arbeidsmarkt. [Downloadable!]
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  6. Eve Caroli & John Van Reenen, 2001. "Skill-Biased Organizational Change? Evidence From A Panel Of British And French Establishments," The Quarterly Journal of Economics, MIT Press, vol. 116(4), pages 1449-1492, November. [Downloadable!] (restricted)
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  7. Sandra E. Black & Lisa M. Lynch, 2004. "What's driving the new economy?: the benefits of workplace innovation," Economic Journal, Royal Economic Society, vol. 114(493), pages F97-F116, 02. [Downloadable!] (restricted)
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  8. Eli Berman & John Bound & Stephen Machin, 1998. "Implications Of Skill-Biased Technological Change: International Evidence," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1245-1279, November. [Downloadable!] (restricted)
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  9. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May. [Downloadable!] (restricted)
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