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Age structure of the workforce and firm performance

Author

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  • Christian Grund
  • Niels Westergaard-Nielsen

Abstract

Purpose - Given the ongoing demographic change in European countries, this paper aims to explore empirically the link between age structures of employees in firms and firm performance. Design/methodology/approach - Based on theoretical considerations, the paper examines the link between both the average age and the standard deviation of employees' age and firms' value added per employee. Linked employer employee data of all private-sector firms in Denmark with at least 20 employees is used. Findings - A pyramidal or inverse U-shaped interrelation is found between mean age and standard deviation of age and value added per employee, respectively. Research limitations/implications - It would be interesting to determine whether the results hold for different countries with other institutional environments. Originality/value - This is the first paper to examine the link between corporate age structures and firm performance for a whole country. The paper gives insights for both academic scholars and practitioners, who may take the results into account in formulating an efficient personnel policy.

Suggested Citation

  • 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, August.
  • Handle: RePEc:eme:ijmpps:v:29:y:2008:i:5:p:410-422
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    References listed on IDEAS

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    More about this item

    Keywords

    Company performance; Age groups; Organizational structures; Demographics;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

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