Workers who expect to experience higher rates of technological change on the job should therefore invest more in schooling and rely less on acquiring specific training on the job. Hence it is impossible to predict a priori the sign of the relationship between technological change and investments in formal company training. We use the 1987-92 National Longitudinal Surveys of Youth to assess the relative importance of the competing effects. This dataset is particularly well suited to this task because it contains detailed information on all formal training spells experienced by the individual. Our findings indicate that production workers in manufacturing industries with higher rates of technological change are significantly more likely to receive formal company training, which is consistent with the notion that technological change makes previously acquired skills obsolete, thereby inducing workers and firms to invest in training to match the specific requirements of the latest innovation.
Technological change is also likely to affect the relationship between education and training.
At higher rates of technological change, however, the training gap between the more and less educated narrows. In addition, we find that the proportion of individuals receiving training increases, and firms are more likely to train individuals who have not received training in the prior period rather than those who were previously trained. Previous studies have found positive correlations between technological change and industry wages 5 and between technological change and the ratio of the earnings of more educated relative to less educated workers. Using the 1979-93 National Longitudinal Surveys of Youth, we examine the role played by observed and unobserved heterogeneity in explaining these positive relationships. We show that wages in industries with higher rates of technological change are higher even after controlling for a variety of individual characteristics using the AFQT score.