Technological Change and the Careers of Older Workers

Recent research has shown that technological change has important labor market implications and in this paper we demonstrate one on the avenues through which this occurs. According to the theory of human capital, technological chanqe will influence the retirement decisions of older workers in two ways. First, workers in industries that are characterized by high rates of technological chanqe will have later retirement ages because these industries require larger amounts of on-the-job training. Second, an unexpected change in the industry's rate of technological change will induce older workers to retire sooner because the required amount of retraining will be an unattractive investment. We matched time-series data on rates of technological change and required amounts of training in 35 industrial sectors with data from the NLS Older Men Survey to test these hypotheses. Our results strongly support both hypotheses.