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Are firms willing to employ a greying and feminizing workforce?

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  • Vandenberghe, V.

Abstract

Are employers willing to employ more older individuals, in particular older women? Higher employment among the older segments of the population will only materialize if firms are willing to employ them. Although several economists have started considering the demand side of the labour market for older individuals, few have considered its gender dimension properly; despite evidence that lifting the overall senior employment rate in the EU requires significantly raising that of women older than 50. In this paper, we posit that labour demand and employability depend to a large extent on how the age/gender composition of the workforce affects firm's profits. Using unique firm-level panel data we produce robust evidence on the causal effect of age/gender on productivity (value added per worker), total labour costs and gross profits. We take advantage of the panel structure of data and resort to first differences to deal with a potential time-invariant heterogeneity bias. Moreover, inspired by recent developments in the production function estimation literature, we also address the risk of simultaneity bias (endogeneity of firm's age-gender mix choices in the short run) by combining first differences with i) the structural approach suggested by Ackerberg, Caves and Frazer (2006), ii) alongside more traditional IV-GMM methods (Blundell and Bond, 1998) where lagged values of labour inputs are used as instruments. Results suggest no negative impact of rising shares of older men on firm's gross profits, but a large negative effect of larger shares of older women. Another interesting result is that the vast and highly feminized services industry does not seem to offer working conditions that mitigate older women's productivity and employability disadvantage, on the contrary. This is not good news for older women's employability and calls for policy interventions in the Belgian private economy aimed at combating women's decline of productivity with age and/or better adapting labour costs to age-gender productivity profiles.

Suggested Citation

  • Vandenberghe, V., 2013. "Are firms willing to employ a greying and feminizing workforce?," Labour Economics, Elsevier, vol. 22(C), pages 30-46.
  • Handle: RePEc:eee:labeco:v:22:y:2013:i:c:p:30-46
    DOI: 10.1016/j.labeco.2012.07.004
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    Cited by:

    1. Andrea Garnero & Stephan Kampelmann & François Rycx, 2014. "The Heterogeneous Effects of Workforce Diversity on Productivity, Wages, and Profits," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 53(3), pages 430-477, July.
    2. Jozef Konings & Luca Marcolin, 2014. "Do wages reflect labor productivity? The case of Belgian regions," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-21, December.
    3. Rycx, Francois & Saks, Yves & Tojerow, Ilan, 2016. "Misalignment of Productivity and Wages across Regions? Evidence from Belgian Matched Panel Data," IZA Discussion Papers 10336, Institute for the Study of Labor (IZA).
    4. Kampelmann, Stephan & Mahy, Benoît & Rycx, Francois & Vermeylen, Guillaume, 2016. "Who Is Your Perfect Match? Educational Norms, Educational Mismatch and Firm Profitability," IZA Discussion Papers 10399, Institute for the Study of Labor (IZA).
    5. Anders Gustafsson & Andreas Stephan & Alice Hallman & Nils Karlsson, 2016. "The “sugar rush” from innovation subsidies: a robust political economy perspective," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 43(4), pages 729-756, November.
    6. Bloom, David E. & Sousa-Poza, Alfonso, 2013. "Ageing and Productivity: Introduction," IZA Discussion Papers 7205, Institute for the Study of Labor (IZA).
    7. François Rycx & Yves Saks & Ilan Tojerow, 2015. "Does Education Raise Productivity and Wages Equally? The Moderating Roles of Age, Gender and Industry," Working Paper Research 281, National Bank of Belgium.
    8. Börsch-Supan, Axel & Weiss, Matthias, 2016. "Productivity and age: Evidence from work teams at the assembly line," The Journal of the Economics of Ageing, Elsevier, vol. 7(C), pages 30-42.
    9. Pekka Ilmakunnas & Mika Maliranta, 2016. "How does the age structure of worker flows affect firm performance?," Journal of Productivity Analysis, Springer, vol. 46(1), pages 43-62, August.
    10. Halvarsson, Daniel & Tingvall, Patrik, 2017. "The Impact of Employing Mismatched Workers on Firm Productivity, Wages and Profits," Ratio Working Papers 291, The Ratio Institute.
    11. Gustafsson, Anders & Gustavsson Tingvall, Patrik & Halvarsson, Daniel, 2017. "Subsidy Entrepreneurs," Ratio Working Papers 303, The Ratio Institute.
    12. Bloom, David E. & Sousa-Poza, Alfonso, 2013. "Ageing and productivity," FZID Discussion Papers 63-2012, University of Hohenheim, Center for Research on Innovation and Services (FZID).
    13. Stephan Kampelmann & François Rycx, 2016. "Wage discrimination against immigrants: measurement with firm-level productivity data," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-24, December.
    14. Lara Lebedinski & Vincent Vandenberghe, 2014. "Assessing education’s contribution to productivity using firm-level evidence," International Journal of Manpower, Emerald Group Publishing, vol. 35(8), pages 1116-1139, October.
    15. Lodefalk, Magnus & Tang, Aili, 2017. "The Effect of Hiring Top Workers on Productivity: What is the Role of Absorptive Capacity?," Working Papers 2017:2, Örebro University, School of Business.
    16. MORIKAWA Masayuki, 2017. "Are Part-time Employees Underpaid or Overpaid? Productivity–wage gaps in Japan," Discussion papers 17077, Research Institute of Economy, Trade and Industry (RIETI).

    More about this item

    Keywords

    Ageing workforce; Gender; Productivity; Profitability; Linked employer–employee data; Endogeneity and simultaneity bias;

    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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