We study the late 1990s boom in the Information and Communications Technology (ICT) sector. We use annual French administrative matched employer-employee data for the period 1994–2015, which we link to the universe of firms’ financial statements from tax filings. The data contain high-quality, longitudinal information on workers’ wages and career paths and on firms’ financial statements. We find that workers who enter in the ICT sector during the boom earn 5% higher entry wages on average but end up with 6% lower wages 15 years out relative to workers from the same cohort with the same characteristics starting in other sectors. Larger capital flows during the boom are indeed associated with larger labor flows in the cross-section of firms. Then, we show that larger capital flows for firms are associated with higher human capital depreciation for these firms’ workers, indicating that capital flows can worsen long-term aggregate human capital during episodes of intense technological change since it both increases the number of workers exposed to a depreciation of their human capital and amplifies the depreciation each worker experiences.
- Date Posted:
- January 3, 2024
A Kongsberg factory west of Oslo produces a missile-defense system that can shoot down drones and other airborne threats from almost 25 miles away. When first deployed in Ukraine in 2022, it recorded a 100% success rate shooting down cruise missiles and drones in its first few months. New customers, though, will have to wait: It takes two years to make one Nasams, and there is already a multiyear backlog. To ramp up, Kongsberg has moved to 24-hour, seven-day shifts and has workers in for some holidays when the factory would typically have been idled for maintenance. That still may not be enough. The defense industry is grappling with a prolonged labor crunch, as it scrambles to find workers with niche skills, from software development to welding, and who are willing to endure lengthy security checks.