Does ICT Affect the Demand for Vocationally Educated Workers in Switzerland?

Abstract

This paper examines the effect of information and communication technologies (ICT) on the demand for workers in Switzerland. We compare the hypotheses that an increase in ICT leads to either upskilling or job polarization, and investigate their implications for countries with a diffuse vocational education and training (VET) system. Using data from a large employer-employee survey, we create a novel measure of ICT based on the percentage of ICT workers within firms. This measure allows us to assess the impact of ICT on the educational composition of the workforce by exploiting variation over time. We find that ICT has an upskilling effect from 1996 to 2018: ICT decreases the demand for low-skilled workers while increasing the demand for high-skilled workers, especially those with a tertiary vocational education. These results strongly suggest that VET is a valid alternative to a strictly academic education, because workers with a tertiary VET degree are as good at adjusting to technological change—and sometimes even superior to—workers with a tertiary academic education.