aging workers/a higher effective retirement age, which is considered necessary to sustainably finance state pensions, will lead to more youth unemployment. to foster employment of older workerswho advocate increases in the retirement age are accused of worsening the chances of young people getting jobs.Technological progress, while rendering some occupations obsolete, constantly creates demand for new occupations. having older people active and productive actually benefits all age groups and spurs the creation of more jobs. Skill-based technical change might further decrease the substitutability between workers of different age cohorts. Technical change constantly adjusts the demand for skills. Although many jobs can now be more cheaply undertaken by computers, the demand for higher levels of skills (e.g. software engineers) has increased. However, learning new skills is costly and older workers may not invest in acquiring new skills if their remaining working life is too short to recoup the costs. In contrast, younger workers will more readily learn new skills because the period over which they can recover their costs is longer. Studies of US data indicate that the sector-specific rate of technological progress leads to more unemployment and the early retirement of older workers . With older workers more likely to exit the labor market under these circumstances, rapid technological change makes the possibility of substituting younger workers for older ones even less likely.