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Does education raise productivity and wages equally? The moderating role of age and gender

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Listed:
  • Stephan Kampelmann

    (Université libre de Bruxelles, SBS-EM, CEB and DULBEA)

  • François Rycx

    (Université libre de Bruxelles, SBS-EM, CEB and DULBEA
    IZA
    IRES
    humanOrg)

  • Yves Saks

    (National Bank of Belgium)

  • Ilan Tojerow

    (Université libre de Bruxelles, SBS-EM, CEB and DULBEA
    IZA)

Abstract

We estimate the impact of education on productivity, wage costs and productivity-wage gaps (i.e. profits) using Belgian linked panel data. Findings highlight that educational credentials have a stronger impact on productivity than on wage costs. Firms’ profitability is found to rise when lower educated workers are substituted by higher educated ones. This effect is found to be more pronounced among younger workers and women. Findings thus suggest that the productivity to wage cost ratio of low-educated workers is detrimental to their employability, especially when young or female. They also support the existence of a glass ceiling on women’s career development.

Suggested Citation

  • Stephan Kampelmann & François Rycx & Yves Saks & Ilan Tojerow, 2018. "Does education raise productivity and wages equally? The moderating role of age and gender," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 7(1), pages 1-37, December.
    • Handle: RePEc:spr:izalbr:v:7:y:2018:i:1:d:10.1186_s40172-017-0061-4
    DOI: 10.1186/s40172-017-0061-4
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    10. Valentine Jacobs, 2021. "Wage Effects of Educational Mismatch According to Workers’ Origin: The Role of Demographics and Firm Characteristics," DULBEA Working Papers 23562, ULB -- Universite Libre de Bruxelles.
    11. Ruohan Wu, 2023. "COVID‐19's impacts on business activities and female workers: Empirical evidence from global developing economies," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(1), pages 163-197, January.
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    More about this item

    Keywords

    Education; Labour costs; Productivity; Gender; Age Linked panel data;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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