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The Effects of Changes in the Unemployment Compensation System on the Adoption of IT by Older Workers

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  • Spitz, Alexandra

Abstract

Two main hypotheses can be found in literature on why elderly workers have a lower probability of using information technology than their younger peers: lower learning capabilities and reduced incentives to invest in human capital. I use law changes in the unemployment compensation system enacted in Germany during the 1980s and 1990s to demonstrate that ?incentives? are more important than ?capabilities? in determining variation in IT usage. Elderly workers only fell behind the IT usage rates of their younger peers during the 1980s and 1990s, when unemployment benefits got increasingly generous, thereby reducing their incentives to invest in human capital.

Suggested Citation

  • Spitz, Alexandra, 2005. "The Effects of Changes in the Unemployment Compensation System on the Adoption of IT by Older Workers," ZEW Discussion Papers 05-40, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  • Handle: RePEc:zbw:zewdip:3283
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    File URL: https://www.econstor.eu/bitstream/10419/24131/1/dp0540.pdf
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    References listed on IDEAS

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    1. Card, David & Krueger, Alan B, 1994. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania," American Economic Review, American Economic Association, vol. 84(4), pages 772-793, September.
    2. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
    3. Barbara Berkel & Axel Börsch-Supan, 2004. "Pension Reform in Germany: The Impact on Retirement Decisions," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 60(3), pages 393-393, September.
    4. Hunt, Jennifer, 1995. "The Effect of Unemployment Compensation on Unemployment Duration in Germany," Journal of Labor Economics, University of Chicago Press, vol. 13(1), pages 88-120, January.
    5. David Card & John E. DiNardo, 2002. "Skill-Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles," Journal of Labor Economics, University of Chicago Press, vol. 20(4), pages 733-783, October.
    6. Borsch-Supan, Axel & Schnabel, Reinhold, 1998. "Social Security and Declining Labor-Force Participation in Germany," American Economic Review, American Economic Association, vol. 88(2), pages 173-178, May.
    7. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863 Elsevier.
    8. Spitz, Alexandra, 2004. "Are Skill Requirements in the Workplace Rising? Stylized Facts and Evidence on Skill-Biased Technological Change," ZEW Discussion Papers 04-33, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    9. 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).
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    Cited by:

    1. Sandrine Levasseur, 2008. "Progrès technologique et employabilité des seniors," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(3), pages 155-184.
    2. Uschi Backes-Gellner & Stephan Veen, 2007. "Aging Workforces and Challenges to Human Resource Management in German Firms," Working Papers 0079, University of Zurich, Institute for Strategy and Business Economics (ISU).
    3. repec:spo:wpecon:info:hdl:2441/6144 is not listed on IDEAS

    More about this item

    Keywords

    differences-in-differences; computer adoption by older workers; changes in unemployment compensation system;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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