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Are Young and Old Workers Harmful for Firm Productivity?

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  • Lallemand, Thierry

    ()
    (Free University of Brussels)

  • Rycx, Francois

    ()
    (Free University of Brussels)

Abstract

This paper investigates the effects of the workforce age structure on the productivity of large Belgian firms. More precisely, it examines different scenarios of changes in the proportion of young (16-29 years), middle-aged (30-49 years) and old (more than 49 years) workers and their expected effects on firm productivity. Using detailed matched employer-employee data, we find that a higher share of young (old) workers within firms is favourable (harmful) for firm value added per capita. Results also show that age structure effects on productivity are stronger in ICT than in non-ICT firms.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3938.

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Length: 34 pages
Date of creation: Jan 2009
Date of revision:
Publication status: published in: De Economist, 2009, 157 (3), 273-292
Handle: RePEc:iza:izadps:dp3938

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Keywords: firm performance; demographic changes; workforce age structure;

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References

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  1. Benoit Dostie, 2006. "Wages, Productivity and Aging," Cahiers de recherche 0645, CIRPEE.
  2. George S Olley & Ariel Pakes, 1992. "The Dynamics Of Productivity In The Telecommunications Equipment Industry," Working Papers 92-2, Center for Economic Studies, U.S. Census Bureau.
  3. Judith K. Hellerstein & David Neumark, 2007. "Production Function and Wage Equation Estimation with Heterogeneous Labor: Evidence from a New Matched Employer-Employee Data Set," NBER Chapters, in: Hard-to-Measure Goods and Services: Essays in Honor of Zvi Griliches, pages 31-71 National Bureau of Economic Research, Inc.
  4. Thierry Lallemand & Robert Plasman & Francois Rycx, 2007. "Wage Structure and Firm Productivity in Belgium," NBER Working Papers 12978, National Bureau of Economic Research, Inc.
  5. Patrick Aubert & Bruno Crépon, 2003. "La productivité des salariés âgés : une tentative d'estimation," Économie et Statistique, Programme National Persée, vol. 368(1), pages 95-119.
  6. Vegard Skirbekk, 2003. "Age and individual productivity: a literature survey," MPIDR Working Papers WP-2003-028, Max Planck Institute for Demographic Research, Rostock, Germany.
  7. Iranzo, Susana & Schivardi, Fabiano & Tosetti, Elisa, 2006. "Skill Dispersion and Firm Productivity: An Analysis with Employer-Employee Matched Data," CEPR Discussion Papers 5539, C.E.P.R. Discussion Papers.
  8. David Autor & Frank Levy & Richard Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, Federal Reserve Bank of San Francisco, issue Nov.
  9. Ilmakunnas, Pekka & Maliranta, Mika, 2003. "Technology, Labor Characteristic and Wage-productivity Gaps," Discussion Papers 860, The Research Institute of the Finnish Economy.
  10. Julia I. Lane & John C. Haltiwanger & James Spletzer, 1999. "Productivity Differences across Employers: The Roles of Employer Size, Age, and Human Capital," American Economic Review, American Economic Association, vol. 89(2), pages 94-98, May.
  11. Johnson, William R, 1978. "A Theory of Job Shopping," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 92(2), pages 261-78, May.
  12. 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.
  13. Malmberg, Bo & Lindh, Thomas & Halvarsson, Max, 2005. "Productivity consequences of workforce ageing - Stagnation or a Horndal effect?," Arbetsrapport, Institute for Futures Studies 2005:17, Institute for Futures Studies.
  14. Grund, Christian & Westergård-Nielsen, Niels C., 2005. "Age Structure of the Workforce and Firm Performance," IZA Discussion Papers 1816, Institute for the Study of Labor (IZA).
  15. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," Review of Economic Studies, Wiley Blackwell, vol. 70(2), pages 317-341, 04.
  16. 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.
  17. Thierry Lallemand & Robert Plasman & François Rycx, 2004. "Intra-Firm Wage Dispersion and Firm Performance: Evidence from Linked Employer-Employee Data," Kyklos, Wiley Blackwell, vol. 57(4), pages 533-558, November.
  18. Jovanovic, Boyan, 1979. "Job Matching and the Theory of Turnover," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 87(5), pages 972-90, October.
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Citations

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Cited by:
  1. Börsch-Supan, Axel & Weiss, Matthias, 2011. "Productivity and age: Evidence from work teams at the assembly line," MEA discussion paper series 07148, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
  2. Vincent VANDENBERGHE, 2011. "Boosting the employment rate of older men and women," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2011010, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  3. Anna Lovasz & Mariann Rigo, 2012. "Vintage Effects, Ageing and Productivity," Budapest Working Papers on the Labour Market 1203, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
  4. Göbel, Christian & Zwick, Thomas, 2013. "Are personnel measures effective in increasing productivity of old workers?," Labour Economics, Elsevier, vol. 22(C), pages 80-93.
  5. Cardoso, Ana Rute & Guimaraes, Paulo & Varejão, José, 2010. "Are Older Workers Worthy of Their Pay? An Empirical Investigation of Age-Productivity and Age-Wage Nexuses," IZA Discussion Papers 5121, Institute for the Study of Labor (IZA).
  6. Christian Göbel & Thomas Zwick, 2012. "Age and Productivity: Sector Differences," De Economist, Springer, vol. 160(1), pages 35-57, March.
  7. Du Caju, Philip & Rycx, Francois & Tojerow, Ilan, 2008. "Rent-Sharing and the Cyclicality of Wage Differentials," IZA Discussion Papers 3844, Institute for the Study of Labor (IZA).
  8. V. Vandenberghe & F. Waltenberg & M. Rigo, 2013. "Ageing and employability. Evidence from Belgian firm-level data," Journal of Productivity Analysis, Springer, vol. 40(1), pages 111-136, August.
  9. Fabrizio Castellucci & Giovanni Pica, 2009. "The Age-Productivity Gradient: Evidence from a Sample of F1 Drivers," CSEF Working Papers, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy 226, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  10. Vandenberghe, V., 2013. "Are firms willing to employ a greying and feminizing workforce?," Labour Economics, Elsevier, vol. 22(C), pages 30-46.

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