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Age and Gender Composition of the Workforce, Productivity and Profits: Evidence from a New Type of Data for German Enterprises

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  • Pfeifer, Christian

    ()
    (Leuphana University Lüneburg)

  • Wagner, Joachim

    ()
    (Leuphana University Lüneburg)

Abstract

This empirical paper documents the relationship between composition of a firm's workforce (with a special focus on age and gender) and its performance (productivity and profitability) for a large representative sample of enterprises from manufacturing industries in Germany. We use unique newly available data that for the first time combine information from the statistics of employees covered by social security that is aggregated at the enterprise level and information from enterprise level surveys performed by the Statistical Offices. Our micro-econometric analysis confirms previous findings of concave age-productivity profiles, which are consistent with human capital theory, and adds a new finding of a rather negative effect of age on firms' profitability, which is consistent with deferred compensation considerations. Moreover, our analysis reveals for the first time that the ceteris paribus lower level of productivity in firms with a higher share of female employees does not go hand in hand with a lower level of profitability in these firms. If anything, profitability is (slightly) higher in firms with a larger share of female employees. This finding might indicate that lower productivity of women is (over)compensated by lower wage costs for women, which might be driven by general labor market discrimination against women.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6381.

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Length: 38 pages
Date of creation: Feb 2012
Date of revision:
Publication status: published in: Contemporary Economics, 2014, 8 (1), 25-49
Handle: RePEc:iza:izadps:dp6381

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Keywords: profitability; productivity; gender; firm performance; ageing; Germany;

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References

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  1. Joachim Wagner, 2010. "Estimated capital stock values for German manufacturing enterprises covered by the cost structure surveys," Working Paper Series in Economics 171, University of Lüneburg, Institute of Economics.
  2. V. Vandenberghe, 2011. "Boosting the Employment Rate of Older Men and Women," De Economist, Springer, Springer, vol. 159(2), pages 159-191, June.
  3. Benoit Dostie, 2011. "Wages, Productivity and Aging," De Economist, Springer, Springer, vol. 159(2), pages 139-158, June.
  4. Mark Doms & Eric J. Bartelsman, 2000. "Understanding Productivity: Lessons from Longitudinal Microdata," Journal of Economic Literature, American Economic Association, vol. 38(3), pages 569-594, September.
  5. Jin-Tan Liu & Meng-Wen Tsou & Ping Wang, 2010. "Workforce Composition And Firm Productivity: Evidence From Taiwan," Economic Inquiry, Western Economic Association International, vol. 48(4), pages 1032-1047, October.
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  7. Stephan Humpert & Christian Pfeifer, 2012. "Explaining Age and Gender Differences in Employment Rates: A Labor Supply Side Perspective," SOEPpapers on Multidisciplinary Panel Data Research 449, DIW Berlin, The German Socio-Economic Panel (SOEP).
  8. Foster, Lucia & Haltiwanger, John C. & Syverson, Chad, 2005. "Reallocation, Firm Turnover, and Efficiency: Selection on Productivity or Profitability?," IZA Discussion Papers 1705, Institute for the Study of Labor (IZA).
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  19. Jan Ours & Lenny Stoeldraijer, 2011. "Age, Wage and Productivity in Dutch Manufacturing," De Economist, Springer, Springer, vol. 159(2), pages 113-137, June.
  20. 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.
  21. Ana Cardoso & Paulo Guimarães & José Varejão, 2011. "Are Older Workers Worthy of Their Pay? An Empirical Investigation of Age-Productivity and Age-Wage Nexuses," De Economist, Springer, Springer, vol. 159(2), pages 95-111, June.
  22. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1.
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Citations

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Cited by:
  1. Christian Pfeifer & Joachim Wagner, 2012. "Is innovative firm behavior correlated with age and gender composition of the workforce? Evidence from a new type of data for German enterprises," Working Paper Series in Economics 256, University of Lüneburg, Institute of Economics.
  2. Vandenberghe, V., 2013. "Are firms willing to employ a greying and feminizing workforce?," Labour Economics, Elsevier, Elsevier, vol. 22(C), pages 30-46.
  3. Stephan Humpert, 2012. "Age and Gender Differences in Job Opportunities," Working Paper Series in Economics 235, University of Lüneburg, Institute of Economics.
  4. Karsten Wasiluk, 2014. "Technology Adoption and Demographic Change," Working Paper Series of the Department of Economics, University of Konstanz 2014-05, Department of Economics, University of Konstanz.

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