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Hebrew U. researcher finds technological change pushing older workers out of the labor market

21.07.2011
Research conducted recently by Hebrew University economist Prof. Joseph Zeira shows that technological change in the workplace is causing older workers to retire early.

The study conducted by Prof. Joseph Zeira of the Hebrew University's department of economics and Dr. Avner Ahituv of Carmel Academic Center, shows that need to rapidly acquire new knowledge as a result of constant technological advances is significantly affecting older working adults and pushing them out of the workforce.

The study examined the labor and employment histories of a broad sample of people over the age of 50 from the Health and Retirement Survey in the United States in the United States. The study divided the employees according to sectors in which they worked, looked at technological changes unique to each sector, and how they affected the employment situation.

The results of the study, published in The Economic Journal of the Royal Economic Society in Britain, significantly support the theory of human capital erosion due to technological changes and their strong impact on older workers. The study found that a rise in one percent in the levels of technological sophistication in a specific sector is enough to increase the likelihood of loss of work for older workers by three percent.

Moreover, Zeira stresses, "This impact is even higher for workers over the age of 60, but is almost nonexistent for workers between the ages of 50 and 60. It follows that the loss of human capital is almost exclusively of older workers".

According to Zeira, the explanation for the findings that older workers are mainly affected is that it is less worthwhile for them or their employers to invest in acquiring new knowledge because their career horizons are shorter. As a result, when new technologies appear in the workplace, older workers tend to lose their jobs or retire early.

"Technological change benefiting the economy and improving the productivity of its workers and their incomes could also worsen the situation of older workers," concludes Prof. Zeira. "Understanding the subject in depth can help us to formulate appropriate social policies that minimize the damage to working adults."

For information, contact:
Rebecca Zeffert, Dept. of Media Relations, the Hebrew University, tel: 02-588-1641, cell: 054-882-0661

Orit Sulitzeanu, Hebrew University spokesperson, tel: 02-5882910, cell: 054-882-0016. Internet site: http://media.huji.ac.il

Rebecca Zeffert | Hebrew University of Jerusalem
Further information:
http://www.huji.ac.il

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