Technological change and employer-provided training : theory and evidence from the UK and Germany

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Technological change and employer-provided training

Abstract There is a wide range of theoretical and empirical analyses suggesting that technological change has increased the demand for skills. Since training is a mechanism to upgrade workers' skills, it would be expected that technical progress strengthens the importance of training on account of the requirement for skills to complement new technology. However, the relationship between technical progress and firms' (employer-funded) continuous training has been little investigated. In our research we address the theoretical gap by building upon existing models from the skillbiased technological change and training literatures. This theoretical platform supports a maintained hypothesis of a positive relationship between training and technological change, which we investigate empirically for Germany using data from the IAB establishment panel. Our empirical findings indicate that in Germany a greater share of workers undergo further/continuing training in establishments subject to technological change. An important issue we raise in our empirical analysis is the possibility of endogeneity/simultaneity between training and technological change

Technological change and employer-provided training: evidence from UK workplaces

Purpose – This paper sets out to examine the link between technological change and continuing training at a workplace level. Design/methodology/approach – The paper hypothesises that workplaces subject to technological change have an increased demand for skills, which induces an increased provision of training. UK data from two waves (1998 and 2004) of the Workplace Employment Relations Survey (WERS) are used to investigate this hypothesis. Findings – Workplaces undertaking technological change are more likely to train their workers and also to provide more days of training per worker. Team working is also associated with a greater number of days spent on training, as are the setting of training targets and the keeping of training records. Training intensity decreases with an increasing share of part-time and manual employees. Conversely, where workplaces face difficulties in filling skilled vacancies, they provide more days of training. Research limitations/implications – The WERS training questions refer only to core experienced employees which, since this group may vary from one workplace to another, may not give a completely consistent measure of either absolute or relative training provision. Because the WERS panel (1998 and 2004) excludes both the dependent variable (training intensity) and the variable of interest (technical change), the analysis is restricted to cross-section estimation. Causal implications of this analysis should be regarded as correspondingly tentative. Practical implications – The findings suggest that one way to induce firms to provide more training is by enhanced incentives for firms to undertake more rapid technological change. In addition, if the current global economic downturn persists, evidence that operating in a declining market is associated with the provision of fewer training days may be of particular concern to training professionals and policy makers. Originality/value – The paper provides empirical evidence concerning the interaction between technological change and training.Change management, Skills, Training, United Kingdom, Workplace

Technological change and employer-provided training: Evidence from German establishments

There is a wide range of theoretical and empirical analyses suggesting that technological change has increased the demand for skills. Since training is a mechanism to upgrade workers’ skills, it would be expected that technical progress strengthens the importance of training on account of the requirement for skills to complement new technology. However, the relationship between technical progress and firms’ (employer-funded) continuous training has been little investigated. In our research we address the theoretical gap by building upon existing models from the skillbiased technological change and training literatures. This theoretical platform supports a maintained hypothesis of a positive relationship between training and technological change, which we investigate empirically for Germany using data from the IAB establishment panel. Our empirical findings indicate that in Germany a greater share of workers undergo further/continuing training in establishments subject to technological change. An important issue we raise in our empirical analysis is the possibility of endogeneity/simultaneity between training and technological change.further training, technological change, skills