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Aging Workforce, Firm Productivity and Labor Costs in Korea: Are Older Workers Costly to Firms?

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  • Joobong Kim

Abstract

Are older workers costly to firms? This study aims to investigate the relationship between an aging workforce on firm productivity and labor costs using a unique Korean firm‐level panel dataset (WPS) covering the period from 2007 to 2011. The primary results show no evidence of a negative relationship between the proportion of older workers and firm productivity, and no significant relationship between the proportion of older workers and labor costs. In addition, the findings of this study implies that failure to account for unobserved firm heterogeneity and endogeneity of changes in age structure biases the results toward finding a correlation between the age structure of workers and firm productivity and labor costs. Consequently, there is a tendency to underestimate the true value of older workers for firms.

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  • Joobong Kim, 2019. "Aging Workforce, Firm Productivity and Labor Costs in Korea: Are Older Workers Costly to Firms?," Asian Economic Journal, East Asian Economic Association, vol. 33(2), pages 115-142, June.
    • Handle: RePEc:bla:asiaec:v:33:y:2019:i:2:p:115-142
    DOI: 10.1111/asej.12180
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    Cited by:

    1. Kim, Hoolda & Song Lee, Bun, 2023. "Aging workforce, wages, and productivity: Do older workers drag productivity down in Korea?," The Journal of the Economics of Ageing, Elsevier, vol. 24(C).

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