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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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Author Info

  • 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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Web page: http://www.iza.org

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Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
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Keywords: profitability; productivity; gender; firm performance; ageing; Germany;

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References

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  1. The International Study Group on Exports and Productivity & Mauro Pisu, 2008. "Exports and productivity – comparable evidence for 14 countries," Working Paper Research 128, National Bank of Belgium.
  2. Lazear, Edward P, 1979. "Why Is There Mandatory Retirement?," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1261-84, December.
  3. Alessandra Cataldi & Stephan Kampelmann & François Rycx, 2011. "Productivity-Wage Gaps Among Age Groups: Does the ICT Environment Matter?," De Economist, Springer, vol. 159(2), pages 193-221, June.
  4. Christian Göbel & Thomas Zwick, 2012. "Age and Productivity: Sector Differences," De Economist, Springer, vol. 160(1), pages 35-57, March.
  5. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1.
  6. 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).
  7. Vincenzo Verardi & Christophe Croux, 2009. "Robust regression in Stata," Stata Journal, StataCorp LP, vol. 9(3), pages 439-453, September.
  8. Chad Syverson, 2011. "What Determines Productivity?," Journal of Economic Literature, American Economic Association, vol. 49(2), pages 326-65, June.
  9. Eric J. Bartelsman & Mark Doms, 2000. "Understanding productivity: lessons from longitudinal microdata," Finance and Economics Discussion Series 2000-19, Board of Governors of the Federal Reserve System (U.S.).
  10. Stephan Humpert & Christian Pfeifer, 2011. "Explaining Age and Gender Differences in Employment Rates: A Labor Supply Side Perspective," Working Paper Series in Economics 214, University of Lüneburg, Institute of Economics.
  11. Mahmut Yasar & Carl H. Nelson & Roderick Rejesus, 2003. "Productivity and Exporting Status of Manufacturing Firms: Evidence from Quantile Regressions," Emory Economics 0323, Department of Economics, Emory University (Atlanta).
  12. 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).
  13. Benoit Dostie, 2006. "Wages, Productivity and Aging," Cahiers de recherche 06-15, HEC Montréal, Institut d'économie appliquée.
  14. Grund, Christian & Westergård-Nielsen, Niels, 2005. "Age Structure of the Workforce and Firm Performance," Working Papers 05-10, University of Aarhus, Aarhus School of Business, Department of Economics.
  15. David Roodman, 2009. "How to do xtabond2: An introduction to difference and system GMM in Stata," Stata Journal, StataCorp LP, vol. 9(1), pages 86-136, March.
  16. Lucia Foster & John Haltiwanger & Chad Syverson, 2005. "Reallocation, Firm Turnover, and Efficiency: Selection on Productivity or Profitability?," NBER Working Papers 11555, National Bureau of Economic Research, Inc.
  17. 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.
  18. 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.
  19. Pierpaolo Parrotta & Dario Pozzoli & Mariola Pytlikova, 2011. "Does Labor Diversity affect Firm Productivity?," Norface Discussion Paper Series 2011022, Norface Research Programme on Migration, Department of Economics, University College London.
  20. 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.
  21. Jan Ours & Lenny Stoeldraijer, 2011. "Age, Wage and Productivity in Dutch Manufacturing," De Economist, Springer, vol. 159(2), pages 113-137, June.
  22. Thierry Lallemand & Robert Plasman & François Rycx, 2003. "Intra-firm wage dispersion and fîrm performance: a review and empirical tests on Belgian data," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 46(4), pages 5-30.
  23. Holger Alda & Stefan Bender & Hermann Gartner, 2005. "European Data Watch: The linked employer-employee dataset created from the IAB establishment panel and the process-produced data of the IAB (LIAB)," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 125(2), pages 327-336.
  24. Thierry Lallemand & François Rycx, 2009. "Are Older Workers Harmful for Firm Productivity?," De Economist, Springer, vol. 157(3), pages 273-292, September.
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Citations

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Cited by:
  1. Stephan Humpert, 2012. "Age and Gender Differences in Job Opportunities," Working Paper Series in Economics 235, University of Lüneburg, Institute of Economics.
  2. Vincent VANDENBERGHE, 2012. "Are firms willing to employ a greying and feminizing workforce?," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2012016, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  3. 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.
  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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