Computer Use and the Employment Status of Older Workers - an Analysis Based on Individual Data

Abstract

This paper analyzes the determinants of computer use by male employees and estimates the impact of computer use on the employment status for older workers, based on individual data from the German Socio-Economic Panel (GSOEP). In line with previous research on the diffusion of new technologies, a strong and negative relationship between the age of workers and computer use is found. The correlation of educational level and occupational status on computer use is significantly positive. However, the estimated impact of computer use on the change in employment status of older workers becomes insignificant when controlling for individual and firm-specific characteristics.JEL-Classification: J14, J26, O33

Employment transitions and computer use of older workers

“…This reduction is not negligible since it is almost one half of the new pension benefits withdrawn in 2004. 5 Compared with the existing literature, our estimated effect is almost twice to the one found by Friedberg (2003) for the US in the 1992-1996 period and is in line with Schleife's (2006) results for German workers in the 1997-1999 period. In order to account for the potential endogeneity of computer use and literacy with respect to employment choices we resort to an IV estimation strategy.…”

“…over a 4-year horizon), even controlling for many individual, firm and sector characteristics, computer use tends to induce delayed retirement. In a very similar framework, Schleife (2006) uses the German Socio Economic Panel to investigate the effect of computer use at work on the retirement outcomes of employed males aged 50-60 in 1997. As Friedberg (2003), she models retirement by means of a linear probability model, distinguishing between different timing of retirement (transitions occurring within 1999 and those occurring within 2001 are studied separately).…”

“…Since half of the households participating to the survey are repeatedly interviewed, our analysis exploits the panel section coming from the 2000, 2002and 2004waves. 2 Following Friedberg (2003 and Schleife (2006), we distinguish between transitions out of employment occurring within the period 2000-2002 and transitions within the period 2000-2004. Short-run transitions are studied on the basis of a sample of 512 male employees aged 47-60 in the year 2000 and tracked down until 2002, while the analysis of long-run transitions is carried out by considering only the 362 workers who remain in the survey until 2004.…”

Age‐biased Technical and Organizational Change, Training and Employment Prospects of Older Workers

“…The idea that technological and organizational changes negatively affect older workers has been tested in various ways in the literature. For Germany, Schleife (2006) finds a strong and negative correlation between workers' age and computer use. On UK data, Borghans and Ter Weel (2002) find no evidence of such phenomenon.…”

“…Schleife (2008) uses a more objective measure of employability and shows that the proportion of older workers receiving IT training is positively correlated with their share in employment three years later. For Germany, Schleife (2008) finds that the positive correlation between IT training provided to older workers and their share in employment is strongest in IT-intensive industries, whereas it is insignificant in less IT-intensive ones. Similarly, Picchio and Van Ours (2011) find that older workers who receive training are more likely to remain employed.…”