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Are Young and Old WorkersS Harmful for Firm Productivity ?

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  • Thierry Lallemand
  • François Rycx

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 ULB -- Universite Libre de Bruxelles in its series Working Papers CEB with number 09-002.RS.

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Length: 33 p.
Date of creation: 2009
Date of revision:
Publication status: Published by:
Handle: RePEc:sol:wpaper:09-002

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Keywords: Firm performance; Workforce age structure; Demographic changes;

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References

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  1. Benoit Dostie, 2006. "Wages, Productivity and Aging," Cahiers de recherche 0645, CIRPEE.
  2. Christian Grund & Niels Westergaard-Nielsen, 2008. "Age structure of the workforce and firm performance," International Journal of Manpower, Emerald Group Publishing, vol. 29(5), pages 410-422, September.
  3. S. Iranzo & F. Schivardi & E. Tosetti, 2006. "Skill dispersion and firm productivity: an analysis with employer-employee matched data," Working Paper CRENoS 200617, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  4. Malmberg, Bo & Lindh, Thomas & Halvarsson, Max, 2005. "Productivity consequences of workforce ageing - Stagnation or a Horndal effect?," Arbetsrapport 2005:17, Institute for Futures Studies.
  5. James Levinsohn & Amil Petrin, 2000. "Estimating Production Functions Using Inputs to Control for Unobservables," NBER Working Papers 7819, National Bureau of Economic Research, Inc.
  6. Thierry Lallemand & Robert Plasman & François Rycx, 2009. "Wage structure and firm productivity in Belgium," ULB Institutional Repository 2013/8733, ULB -- Universite Libre de Bruxelles.
  7. Jovanovic, Boyan, 1979. "Job Matching and the Theory of Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 972-90, October.
  8. Vegard Skirbekk, 2003. "Age and individual productivity: a literature survey," MPIDR Working Papers WP-2003-028, Max Planck Institute for Demographic Research, Rostock, Germany.
  9. G. Steven Olley & Ariel Pakes, 1992. "The Dynamics of Productivity in the Telecommunications Equipment Industry," NBER Working Papers 3977, National Bureau of Economic Research, Inc.
  10. Ilmakunnas, Pekka & Maliranta, Mika, 2003. "Technology, Labor Characteristic and Wage-productivity Gaps," Discussion Papers 860, The Research Institute of the Finnish Economy.
  11. Judith K. Hellerstein & David Neumark, 2004. "Production Function and Wage Equation Estimation with Heterogeneous Labor: Evidence from a New Matched Employer-Employee Data Set," NBER Working Papers 10325, National Bureau of Economic Research, Inc.
  12. Johnson, William R, 1978. "A Theory of Job Shopping," The Quarterly Journal of Economics, MIT Press, vol. 92(2), pages 261-78, May.
  13. 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 208, Research Department of Statistics Norway.
  14. 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.
  15. Patrick Aubert & Bruno Crépon, 2003. "La productivité des salariés âgés : une tentative d'estimation," Économie et Statistique, Programme National Persée, vol. 368(1), pages 95-119.
  16. Judith K. Hellerstein & David Neumark & Kenneth R. Troske, 1996. "Wages, Productivity, and Worker Characteristics: Evidence from Plant-Level Production Functions and Wage Equations," NBER Working Papers 5626, National Bureau of Economic Research, Inc.
  17. David H. Autor & Frank Levy & Richard J. Murnane, 2001. "The Skill Content of Recent Technological Change: An Empirical Exploration," NBER Working Papers 8337, National Bureau of Economic Research, Inc.
  18. François Rycx & Thierry Lallemand & Robert Plasman, 2004. "Intra-firm wage dispersion and firm performance: evidence from linked employer-employee data," ULB Institutional Repository 2013/781, ULB -- Universite Libre de Bruxelles.
  19. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-97, November.
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Citations

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Cited by:
  1. Philip Du Caju & François Rycx & Ilan Tojerow, 2008. "Rent-Sharing and the Cyclicality of Wage Differentials," Working Papers CEB 08-035.RS, ULB -- Universite Libre de Bruxelles.
  2. 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).
  3. Fabrizio Castellucci & Mario Padula & Giovanni Pica, 2009. "The Age-Productivity Gradient: Evidence from a Sample of F1 Drivers," CSEF Working Papers 226, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  4. Mariann RIGO & Vincent VANDENBERGHE & Fabio WALTENBERG, 2012. "Ageing and Employability. Evidence from Belgian Firm-Level Data," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2012011, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  5. 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.
  6. V. Vandenberghe, 2011. "Boosting the Employment Rate of Older Men and Women," De Economist, Springer, vol. 159(2), pages 159-191, June.
  7. Christian Göbel & Thomas Zwick, 2012. "Age and Productivity: Sector Differences," De Economist, Springer, vol. 160(1), pages 35-57, March.
  8. 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).

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