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Age, Wage and Productivity

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  • Jan C. van Ours
  • Lenny Stoeldraijer

Abstract

Previous empirical studies on the effect of age on productivity and wages find contradicting results. Some studies find that if workers grow older there is an increasing gap between productivity and wages, i.e. wages increase with age while productivity does not or does not increase at the same pace. However, other studies find no evidence of such an age related pay-productivity gap. We perform an analysis of the relationship between age, wage and productivity using a matched worker-firm panel dataset from Dutch manufacturing covering the period 2000-2005. We find little evidence of an age related pay-productivity gap.

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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2965.

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Date of creation: 2010
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Handle: RePEc:ces:ceswps:_2965

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Keywords: age; wage; productivity;

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References

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  1. Jan Ours, 2009. "Will You Still Need Me: When I’m 64?," De Economist, Springer, vol. 157(4), pages 441-460, December.
  2. Lazear, Edward P, 1979. "Why Is There Mandatory Retirement?," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1261-84, December.
  3. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2002. "Instrumental variables and GMM: Estimation and testing," Boston College Working Papers in Economics 545, Boston College Department of Economics, revised 14 Feb 2003.
  4. Vegard Skirbekk, 2003. "Age and individual productivity: a literature survey," MPIDR Working Papers WP-2003-028, Max Planck Institute for Demographic Research, Rostock, Germany.
  5. Benoit Dostie, 2006. "Wages, Productivity and Aging," Cahiers de recherche 0645, CIRPEE.
  6. Ilmakunnas, Pekka & Maliranta, Mika, 2007. "Aging, Labor Turnover and Firm Performance," Discussion Papers 1092, The Research Institute of the Finnish Economy.
  7. Malmberg, Bo & Lindh, Thomas & Halvarsson, Max, 2005. "Productivity consequences of workforce ageing - Stagnation or a Horndal effect?," Arbetsrapport 2005:17, Institute for Futures Studies.
  8. Pekka Ilmakunnas & Mika Maliranta, 2005. "Technology, Labour Characteristics and Wage-productivity Gaps," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 67(5), pages 623-645, October.
  9. Judith K. Hellerstein & David Neumark & Kenneth R. Troske, 1996. "Wages, Productivity, and Worker Characteristics: Evidence from Plant-Level Production Functions and Wage Equations," NBER Working Papers 5626, National Bureau of Economic Research, Inc.
  10. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2007. "Enhanced routines for instrumental variables/GMM estimation and testing," Boston College Working Papers in Economics 667, Boston College Department of Economics, revised 05 Sep 2007.
  11. Judith Hellerstein & David Neumark, 2004. "Production Function and Wage Equation Estimation with Heterogenous Labor: Evidence from a New Matched Employer-Employee Dataset," Working Papers 04-05, Center for Economic Studies, U.S. Census Bureau.
  12. Ours, J.C. van, 2009. "Will You still Need Me - When I'm 64?," Discussion Paper 2009-51, Tilburg University, Center for Economic Research.
  13. Haegeland, T. & Klette, T.J., 1998. "Do Higher Wages Reflect Higher Productivity? Education, Gender and Experience Premiums in a Matched Plant-Worker Data Set," Memorandum 24/1998, Oslo University, Department of Economics.
  14. Göbel, Christian & Zwick, Thomas, 2009. "Age and productivity: evidence from linked employer employee data," ZEW Discussion Papers 09-020, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  15. Thierry Lallemand & François Rycx, 2009. "Are Older Workers Harmful for Firm Productivity?," De Economist, Springer, vol. 157(3), pages 273-292, September.
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Citations

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Cited by:
  1. Hendrik P. Van Dalen & Kène Henkens & Joop Schippers, 2010. "How do employers cope with an ageing workforce?," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 22(32), pages 1015-1036, June.
  2. Böckerman, Petri & Bryson, Alex & Ilmakunnas, Pekka, 2012. "Does high involvement management improve worker wellbeing?," Journal of Economic Behavior & Organization, Elsevier, vol. 84(2), pages 660-680.
  3. Göbel, Christian & Zwick, Thomas, 2011. "Age and productivity: Sector differences?," ZEW Discussion Papers 11-058, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  4. Pekka Ilmakunnas & Seija Ilmakunnas, 2011. "Diversity at the Workplace: Whom Does it Benefit?," De Economist, Springer, vol. 159(2), pages 223-255, June.
  5. Jan Ours, 2009. "Will You Still Need Me: When I’m 64?," De Economist, Springer, vol. 157(4), pages 441-460, December.
  6. Dalen, H.P. van & Henkens, K., 2013. "Dilemmas Of Downsizing During the Great Recession: Crisis Strategies of European Employers," Discussion Paper 2013-026, Tilburg University, Center for Economic Research.
  7. Mahlberg, Bernhard & Freund, Inga & Crespo Cuaresma, Jesús & Prskawetz, Alexia, 2011. "Ageing, productivity and wages in Austria," ECON WPS - Vienna University of Technology Working Papers in Economic Theory and Policy 03/2011, Vienna University of Technology, Institute for Mathematical Methods in Economics, Research Group Economics (ECON).

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