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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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  1. 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, Oslo University, Department of Economics 24/1998, Oslo University, Department of Economics.
  2. Hellerstein, Judith K & Neumark, David & Troske, Kenneth R, 1999. "Wages, Productivity, and Worker Characteristics: Evidence from Plant-Level Production Functions and Wage Equations," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 17(3), pages 409-46, July.
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  4. 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, National Bureau of Economic Research, Inc, in: Hard-to-Measure Goods and Services: Essays in Honor of Zvi Griliches, pages 31-71 National Bureau of Economic Research, Inc.
  5. 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.
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  8. Thierry Lallemand & Robert Plasman & Francois Rycx, 2007. "Wage Structure and Firm Productivity in Belgium," NBER Working Papers 12978, National Bureau of Economic Research, Inc.
  9. Thierry Lallemand & Robert Plasman & François Rycx, 2004. "Intra-Firm Wage Dispersion and Firm Performance: Evidence from Linked Employer-Employee Data," Kyklos, Wiley Blackwell, Wiley Blackwell, vol. 57(4), pages 533-558, November.
  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, American Economic Association, vol. 89(2), pages 94-98, May.
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Citations

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Cited by:
  1. Anna Lovasz & Mariann Rigo, 2012. "Vintage Effects, Ageing and Productivity," Budapest Working Papers on the Labour Market, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences 1203, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
  2. 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.
  3. Vincent VANDENBERGHE, 2012. "Are firms willing to employ a greying and feminizing workforce?," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales), Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) 2012016, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  4. 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).
  5. Göbel, Christian & Zwick, Thomas, 2011. "Age and productivity: Sector differences?," ZEW Discussion Papers, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research 11-058, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  6. V. Vandenberghe & F. Waltenberg & M. Rigo, 2013. "Ageing and employability. Evidence from Belgian firm-level data," Journal of Productivity Analysis, Springer, Springer, vol. 40(1), pages 111-136, August.
  7. Börsch-Supan, Axel & Weiss, Matthias, 2011. "Productivity and age: Evidence from work teams at the assembly line," MEA discussion paper series, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy 07148, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
  8. Philip Du Caju & François Rycx & Ilan Tojerow, 2008. "Rent-sharing and the cyclicality of wage differentials," DULBEA Working Papers, ULB -- Universite Libre de Bruxelles 08-23.RS, ULB -- Universite Libre de Bruxelles.
  9. Vincent VANDENBERGHE, 2011. "Boosting the employment rate of older men and women," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales), Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) 2011010, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  10. Göbel, Christian & Zwick, Thomas, 2013. "Are personnel measures effective in increasing productivity of old workers?," Labour Economics, Elsevier, Elsevier, vol. 22(C), pages 80-93.

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