Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/334662 
Year of Publication: 
2025
Series/Report no.: 
IZA Discussion Papers No. 18247
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
How do firms and workers adjust to trade and technology shocks? We analyze two mechanisms that have received little attention: training that upgrades skills and early retirement that shifts adjustment costs to public pension systems. We combine novel data on training participation and early retirement in German local labor markets with established measures of exposure to trade competition and robot adoption. Results indicate that negative trade shocks reduce training—particularly in manufacturing—while robot exposure increases training—particularly in indirectly affected services. Both shocks raise early retirement among manufacturing workers. Structural change thus induces both productivity-enhancing and productivity-reducing responses, challenging simple narratives of labor market adaptation and highlighting the scope for policy to promote adjustment mechanisms conducive to aggregate productivity.
Subjects: 
training
retirement
trade
technological change
automation
robots
firms
workers
labor market
JEL: 
J24
J26
O33
F16
R11
Document Type: 
Working Paper

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