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Aging, Labor Turnover and Firm Performance

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  • Ilmakunnas, Pekka
  • Maliranta, Mika

Abstract

We study whether older workers are costly to firms. Our estimation equations are derived from a variant of the decomposition methods frequently used for measuring micro-level sources of industry productivity growth. By using comprehensive linked employer-employee data from the Finnish business sector, we study the productivity and wage effects, and hence the profitability effects, of hiring and separation of younger and older workers. The evidence shows that separations of older workers are profitable to firms, especially in the manufacturing ICT-industries. Robustness checks include the use of regional labor supply and other variables as instruments for the potential endogeneity of the labor flows.

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Bibliographic Info

Paper provided by The Research Institute of the Finnish Economy in its series Discussion Papers with number 1092.

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Length: 40 pages
Date of creation: 2007
Date of revision:
Handle: RePEc:rif:dpaper:1092

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Related research

Keywords: aging; productivity; wage; profits; hiring; separation; employer-employee data;

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Cited by:
  1. van Ours, Jan C. & Stoeldraijer, Lenny, 2010. "Age, Wage and Productivity," IZA Discussion Papers 4765, Institute for the Study of Labor (IZA).
  2. van Ours, Jan C., 2009. "Will You Still Need Me – When I'm 64?," IZA Discussion Papers 4264, Institute for the Study of Labor (IZA).
  3. 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.
  4. 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).
  5. Ours, J.C. van, 2009. "Will You still Need Me - When I'm 64?," Discussion Paper 2009-51, Tilburg University, Center for Economic Research.
  6. Mika Maliranta & Satu Nurmi & Hanna Virtanen, 2010. "Resources in vocational education and post-schooling outcomes," International Journal of Manpower, Emerald Group Publishing, vol. 31(5), pages 520-544, September.
  7. Katharina Frosch, 2009. "Do only new brooms sweep clean? A review on workforce age and innovation," MPIDR Working Papers WP-2009-005, Max Planck Institute for Demographic Research, Rostock, Germany.
  8. Schimke, Antje, 2012. "Entrepreneurial aging and employment growth in the context of extreme growth events," Working Paper Series in Economics 39, Karlsruhe Institute of Technology (KIT), Department of Economics and Business Engineering.
  9. Frosch, Katharina & Göbel, Christian & Zwick, Thomas, 2011. "Separating wheat and chaff: age-specific staffing strategies and innovative performance at the firm level," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 44(4), pages 321-338.
  10. Maliranta, Mika & Mohnen, Pierre & Rouvinen, Petri, 2008. "Is Inter-Firm Labor Mobility a Channel of Knowledge spillovers? Evidence from a Linked Employer-Employee Panel," UNU-MERIT Working Paper Series 005, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology.
  11. Mika Maliranta & Satu Nurmi & Hanna Virtanen, 2008. "It takes three to tango in employment: Matching vocational education organisations, students and companies in labour market," Economics of Education Working Paper Series 0022, University of Zurich, Institute for Strategy and Business Economics (ISU).
  12. Stoeldraijer, Lenny & van Ours, Jan C., 2010. "Age, wage and productivity," CEPR Discussion Papers 7713, C.E.P.R. Discussion Papers.
  13. Jan Ours & Lenny Stoeldraijer, 2011. "Age, Wage and Productivity in Dutch Manufacturing," De Economist, Springer, vol. 159(2), pages 113-137, June.

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