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Does skill obsolescence increase the risk of employment loss?

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  • Jim Allen
  • Andries de Grip

Abstract

In this article, we analyse whether technological change induces skill obsolescence and early labour market exit, and to what extent training participation and on the job learning reduce these risks. Using panel data on older workers, we find that workers report skill obsolescence more often when learning is a structural characteristic of the job. This perceived skill obsolescence is not related to a higher probability of losing employment. Instead, workers who experience skill obsolescence appear to learn more on the job and participate more often in training, which decreases the risk of losing employment. These results are consistent with the dynamic model of skill obsolescence and employment loss we develop in this article. Moreover, we find that when workers with long job tenures decrease their training participation, this is an early indicator of future job loss.

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  • Jim Allen & Andries de Grip, 2012. "Does skill obsolescence increase the risk of employment loss?," Applied Economics, Taylor & Francis Journals, vol. 44(25), pages 3237-3245, September.
    • Handle: RePEc:taf:applec:44:y:2012:i:25:p:3237-3245
    DOI: 10.1080/00036846.2011.570727
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    Cited by:

    1. van Wetten, Sanne J.L. & Gerards, Ruud & de Grip, Andries, 2020. "Are graduates’ intrapreneurial skills optimally used for innovation?," Technovation, Elsevier, vol. 96.
    2. Hanan Morsy & Adamon N. Mukasa, 2019. "Working Paper 326 - Youth Jobs, Skill and Educational Mismatches in Africa," Working Paper Series 2452, African Development Bank.
    3. Driouchi, Ahmed & Harkat, Tahar, 2016. "Macroeconomic and School Variables to Reveal Country Choices of General and Vocational Education: A Cross-Country Analysis with focus on Arab Economies," MPRA Paper 73455, University Library of Munich, Germany.
    4. Seamus McGuinness & Konstantinos Pouliakas & Paul Redmond, 2023. "Skills-displacing technological change and its impact on jobs: challenging technological alarmism?," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 32(3), pages 370-392, April.
    5. Yashiro, Naomitsu & Kyyrä, Tomi & Hwang, Hyunjeong & Tuomala, Juha, 2020. "Technology, Labour Market Institutions and Early Retirement: Evidence from Finland," IZA Discussion Papers 13990, Institute of Labor Economics (IZA).
    6. Andries de Grip, 2015. "The importance of informal learning at work," IZA World of Labor, Institute of Labor Economics (IZA), pages 162-162, June.
    7. Seamus McGuinness & Konstantinos Pouliakas & Paul Redmond, 2018. "Skills Mismatch: Concepts, Measurement And Policy Approaches," Journal of Economic Surveys, Wiley Blackwell, vol. 32(4), pages 985-1015, September.
    8. Hanan Morsy & Adamon N. Mukasa, 2020. "‘Mind the mismatch?’ Incidence, drivers, and persistence of African youths' skill and educational mismatches," African Development Review, African Development Bank, vol. 32(S1), pages 5-19, November.
    9. Nicola Gagliardi & Elena Grinza & François Rycx, 2021. "Can You Teach an Old Dog New Tricks? New Evidence on the Impact of Tenure on Productivity," Working Papers CEB 21-007, ULB -- Universite Libre de Bruxelles.
    10. McGuinness, Seamus & Pouliakas, Konstantinos & Redmond, Paul, 2017. "How Useful Is the Concept of Skills Mismatch?," IZA Discussion Papers 10786, Institute of Labor Economics (IZA).
    11. Luminita Popescu & Anica Iancu & Marioara Avram & Daniel Avram & Virgil Popescu, 2020. "The Role of Managerial Skills in the Sustainable Development of SMEs in Mehedinti County, Romania," Sustainability, MDPI, vol. 12(3), pages 1-16, February.
    12. Jose M. Quintero-Holguin, 2018. "Wage inequality, skills and mastering new technologies," Documentos CEDE 16353, Universidad de los Andes, Facultad de Economía, CEDE.
    13. Bram P. I. Fleuren & Andries de Grip & Nicole W. H. Jansen & IJmert Kant & Fred R. H. Zijlstra, 2020. "Unshrouding the Sphere from the Clouds: Towards a Comprehensive Conceptual Framework for Sustainable Employability," Sustainability, MDPI, vol. 12(16), pages 1-28, August.
    14. Morsy, Hanan & Mukasa, Adamon, 2019. "Youth Jobs, Skill and Educational Mismatches in Africa," MPRA Paper 100394, University Library of Munich, Germany.
    15. Driouchi, Ahmed, 2015. "Threats to Skills of Unemployed Qualified Labor in Arab Economies," MPRA Paper 67361, University Library of Munich, Germany.
    16. Leonardo Pompa, 2021. "Exponential Atlases: A Metaphysical Approach to the Organizational Rapid Growth," International Journal of Business and Management, Canadian Center of Science and Education, vol. 14(4), pages 143-143, July.
    17. Driouchi, Ahmed, 2014. "Unemployment Persistence & Risks of Skill Obsolescence in Arab Countries," MPRA Paper 53793, University Library of Munich, Germany.
    18. Alexandru Avram & Marco Benvenuto & Costin Daniel Avram & Ginevra Gravili, 2019. "Assuring SME’s Sustainable Competitiveness in the Digital Era: A Labor Policy between Guaranteed Minimum Wage and ICT Skill Mismatch," Sustainability, MDPI, vol. 11(10), pages 1-20, May.
    19. Andries De Grip, 2024. "The importance of informal learning at work: On-the-job learning is more important for workers’ human capital development than formal training," IZA World of Labor, Institute of Labor Economics (IZA), pages 1622-1622, March.
    20. Kouadio Clément KOUAKOU & Andoh Régis Vianney YAPO, 2019. "Mesures et déterminants de l’inadéquation compétences-emploi en Côte d’Ivoire," Working Paper 95840cf0-b39b-45ab-9108-d, Agence française de développement.

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