Job Training, Human Capital, and Labour Market Outcomes: The Role of Automation, Offshoring, and Digitization

Pillars Report

In recent decades, major secular trends in the labor market have significantly changed occupations and the skills demanded in occupations. In particular, advances in technologies and international outsourcing have decreased demand for certain types of tasks. Routine occupations are particularly vulnerable to automation risks, i.e., the risk that their tasks will be replaced by robots and automation technologies. Further, workers in occupations performing tasks that can be outsourced abroad face similar changes in skill demand due to lower trade barriers and technological advances. Moreover, the ongoing digitization of workplaces and the increasing relevance of computers have likely increased digital skill requirements.

In light of these changing skill demands, the ability to work with computers and use the Internet — more generally, possessing digital skills — has become increasingly important in many occupations in recent decades. It has also been shown that workers with higher digital skills receive a wage premium. Thus, the increasing importance of digital skills raises the question of how workers who lack these skills can actually acquire them. One way to equip workers with digital skills is through job training. Thus, we investigate whether job training can improve workers’ digital skills, and consequently labor market success.