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Age, Wage and Productivity

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  • van Ours, Jan C.

    ()
    (Tilburg University)

  • Stoeldraijer, Lenny

    ()
    (Tilburg University)

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 Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4765.

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Length: 50 pages
Date of creation: Feb 2010
Date of revision:
Publication status: published as 'Age, Wage and Productivity in Dutch Manufacturing' in: De Economist, 2011, 159 (2) , 113-137
Handle: RePEc:iza:izadps:dp4765

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Keywords: wage; productivity; age;

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References

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  1. Dostie, Benoit, 2006. "Wages, Productivity and Aging," IZA Discussion Papers 2496, Institute for the Study of Labor (IZA).
  2. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2002. "Instrumental variables and GMM: Estimation and testing," North American Stata Users' Group Meetings 2003, Stata Users Group 05, Stata Users Group.
  3. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2007. "Enhanced routines for instrumental variables/GMM estimation and testing," CERT Discussion Papers, Centre for Economic Reform and Transformation, Heriot Watt University 0706, Centre for Economic Reform and Transformation, Heriot Watt University.
  4. Thierry Lallemand & François Rycx, 2009. "Are Older Workers Harmful for Firm Productivity?," De Economist, Springer, Springer, vol. 157(3), pages 273-292, September.
  5. Torbjørn Hægeland & Tor Jakob Klette, 1997. "Do Higher Wages Reflect Higher Productivity? Education, Gender and Experience Premiums in a Matched Plant-Worker Data Set," Discussion Papers, Research Department of Statistics Norway 208, Research Department of Statistics Norway.
  6. 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.
  7. 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.
  8. Jan Ours, 2009. "Will You Still Need Me: When I’m 64?," De Economist, Springer, Springer, vol. 157(4), pages 441-460, December.
  9. 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.
  10. Lazear, Edward P, 1979. "Why Is There Mandatory Retirement?," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 87(6), pages 1261-84, December.
  11. Ilmakunnas, Pekka & Maliranta, Mika, 2007. "Aging, Labor Turnover and Firm Performance," Discussion Papers, The Research Institute of the Finnish Economy 1092, The Research Institute of the Finnish Economy.
  12. Vegard Skirbekk, 2003. "Age and individual productivity: a literature survey," MPIDR Working Papers WP-2003-028, Max Planck Institute for Demographic Research, Rostock, Germany.
  13. Ours, J.C. van, 2009. "Will You still Need Me - When I'm 64?," Discussion Paper, Tilburg University, Center for Economic Research 2009-51, Tilburg University, Center for Economic Research.
  14. 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.
  15. 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.
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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, Elsevier, vol. 84(2), pages 660-680.
  3. 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).
  4. Christian Göbel & Thomas Zwick, 2012. "Age and Productivity: Sector Differences," De Economist, Springer, Springer, vol. 160(1), pages 35-57, March.
  5. Jan Ours, 2009. "Will You Still Need Me: When I’m 64?," De Economist, Springer, Springer, vol. 157(4), pages 441-460, December.
  6. Pekka Ilmakunnas & Seija Ilmakunnas, 2011. "Diversity at the Workplace: Whom Does it Benefit?," De Economist, Springer, Springer, vol. 159(2), pages 223-255, June.
  7. Dalen, H.P. van & Henkens, K., 2013. "Dilemmas Of Downsizing During the Great Recession: Crisis Strategies of European Employers," Discussion Paper, Tilburg University, Center for Economic Research 2013-026, Tilburg University, Center for Economic Research.

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