Heterogeneity matters: labour productivity differentiated by age and skills
AbstractThis study aims at evaluating the actual profile of marginal productivity across age groups within the workforce. As age-productivity profiles might differ between occupations, we differentiate the workforce simultaneously by skills (low-skilled, high-skilled) and by age (young, middle-aged, old). Estimating a production function with a nested constant-elasticity-of-substitution (CES) specification in labour allows imperfect substitution between different categories of workers. We use French datasets for manufacturing, services and trade sectors. Labour productivity is found to be the lowest for the low-skilled older workers while high-skilled senior employees in manufacturing and trade are the most productive group. Throughout the sectors, wage rates vary considerably less than productivity and wage profiles are steeper for high-skilled workers. The relative productivity/wage ratio is found to be sector-specific. It is the highest for young workers in manufacturing while in services and trade it is the highest for the middle-age employees.
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Bibliographic InfoPaper provided by Institut National de la Statistique et des Etudes Economiques, DESE in its series Documents de Travail de la DESE - Working Papers of the DESE with number g2011-04.
Date of creation: 2011
Date of revision:
ageing; older workers; labour productivity; CES production function; endogeneity;
Other versions of this item:
- Muriel Roger & Malgorzata Wasmer, 2009. "Heterogeneity matters: labour productivity differentiated by age and skills," Working Papers halshs-00575086, HAL.
- 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
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
This paper has been announced in the following NEP Reports:
- NEP-AGE-2011-04-30 (Economics of Ageing)
- NEP-ALL-2011-04-30 (All new papers)
- NEP-BEC-2011-04-30 (Business Economics)
- NEP-EFF-2011-04-30 (Efficiency & Productivity)
- NEP-LAB-2011-04-30 (Labour Economics)
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- Anna Ruzik-Sierdzinska & Claudia Villosio & Michele Belloni & Maciej Lis & Monika Potoczna, 2013. "Age and productivity. Human Capital Accumulation and Depreciation," CASE Network Reports 0114, CASE-Center for Social and Economic Research.
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