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Are firms willing to employ a greying and feminizing workforce?

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  • Vincent VANDENBERGHE

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES), Economics School of Louvain (ESL),)

Abstract

Are employers willing to employ more older individuals, in particular older women? Higher employment among the older segments of the population will only materialise 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 & Frazer (2006), ii) alongside more traditional IV-GMM methods (Blundell & 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

  • Vincent VANDENBERGHE, 2012. "Are firms willing to employ a greying and feminizing workforce?," LIDAM Discussion Papers IRES 2012016, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  • Handle: RePEc:ctl:louvir:2012016
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    References listed on IDEAS

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    Citations

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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. Bloom, David E. & Sousa-Poza, Alfonso, 2013. "Ageing and Productivity: Introduction," IZA Discussion Papers 7205, Institute of Labor Economics (IZA).
    3. Andrea ARIU & Vincent VANDENBERGHE, 2014. "Assessing the role of ageing, feminising and better-educated workforces on TFP growth," LIDAM Discussion Papers IRES 2014017, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    4. Gidehag, Anton & Lodefalk, Magnus, 2016. "Recruiting for Small Business Growth: Micro-level Evidence," Working Papers 2016:6, Örebro University, School of Business.
    5. Grinza, Elena & Rycx, Francois, 2018. "The Impact of Sickness Absenteeism on Productivity: New Evidence from Belgian Matched Panel Data," IZA Discussion Papers 11543, Institute of Labor Economics (IZA).
    6. 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).
    7. 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.

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    More about this item

    Keywords

    ageing workforce; gender; productivity; profitability; linked employer-employee data; endogeneity and simultaneity bias;
    All these keywords.

    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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