Age-Biased Technological and Organizational Change: Firm-Level Evidence and Management Implications

This paper examines the question, whether the growing use of new technologies anddecentralized forms of work organization affects the age structure of workforces withinfirms. The initial idea behind this relationship is that technological and organizationalchange may not only be skill-biased, but also age-biased. Based on human capital theoreticalexplanations that mainly focus on skill obsolescence in association with the needto acquire new skills, the hypothesis of an age-biased technological and organizationalchange (ABTOC) is derived and tested econometrically using German firm-level data.The empirical results show that the adoption of technological and organizational innovationsdecreases the firms’ demand for older workers and increases the demand foryounger workers. Hence, ABTOC is found to be at the expense of older workers. SinceABTOC does not fit to the current development in terms of age-specific labor supply,this paper also suggests human resource management practices that encourage firms tocombine the use of new technologies and organizational forms with an ageing workforce.