Technology, Capital Vintages and Training - Role of capital investments in firm’s skill formation strategy

Description

In this paper, we analyze how replacing obsolete capital through investment spikes influences a firm’s skill formation strategy. We use a stacked DiD event study design on employer-employee data for a representative sample of German firms. We find that investment spikes positively affect employment growth, firm productivity and firm sponsored training of employees and apprentices. Decomposing overall investments, we find that technology-complementary rather than technology-specific investment spikes drive the increase in labor demand among both workers and apprentices. Finally, we
observe an upscaling rather than an upskilling of the workforce as treated firms expand employment across the skill spectrum. We interpret these findings as learning-by-doing effects where new vintage of capital induces firms to create an optimal skills bundle using hiring and training of its workers and apprentices. Our results highlight the role of training in enabling firms to integrate new capital vintages in their production process.

Period	25 Feb 2025
Event title	GSBE Learning & Work seminar series
Event type	Seminar
Location	Maastricht, NetherlandsShow on map
Degree of Recognition	National