Young, skilled workers, their importance to the economy and how to get them: a study of OECD countries in the next century

Jeromey Temple, Australian National University

According to Allan Larsson of the European Commission, 80 per cent of technology becomes obsolete within 10 years while 80 per cent of the labour force gained its qualifications more than 10 years ago. Larsson argues that life-long learning provides at least a partial solution to this dilemma. We argue in this paper that there is no substitute for young skilled workers if a country is to maintain its international competitiveness. In every wave of technology, it is young workers who assimilate new technology playing a role that is complementary to older workers. Young workers enhance the productivity of older workers, and vice versa. We first validate this argument using detailed occupation and industry data for Australia over the past 20 years. We then examine the potential for various OECD countries to enhance their supplies of young workers using immigration, fertility and increased labour force participation.