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Productivity consequences of workforce ageing - Stagnation or a Horndal effect?

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Data linking the production of value-added at the plant level to the individual employees provide an opportunity to deepen the understanding of how the labor force composition relates to productivity performance. In view of the anticipated aging of the workforce in industrialised economies a body of research has emerged that indicate that individual productivity has a more pronounced hump-shape than the wage profile. This paper studies these issues by examining the composition of the workforce at the plant level in relation to the productivity performance of the plants. Our data cover the Swedish mining and manufacturing industries 1985-1996. The fact that older workers selectively work with older capital may have biased results found in the literature. Endogeneity of workforce composition poses serious estimation problems, but our attempts to cope with these problems tend to indicate that biases in general go in the direction that productivity of the young is overestimated and the productivity of the old is underestimated.

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  • Malmberg, Bo & Lindh, Thomas & Halvarsson, Max, 2005. "Productivity consequences of workforce ageing - Stagnation or a Horndal effect?," Arbetsrapport 2005:17, Institute for Futures Studies.
  • Handle: RePEc:hhs:ifswps:2005_017
    Note: ISSN 1652-120X ISBN 91-89655-75-3
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    Cited by:

    1. Jan Ours, 2009. "Will You Still Need Me: When I’m 64?," De Economist, Springer, vol. 157(4), pages 441-460, December.
    2. Göbel, Christian & Zwick, Thomas, 2010. "Which personnel measures are effective in increasing productivity of old workers?," ZEW Discussion Papers 10-069, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    3. Alessandra Cataldi & Stephan Kampelmann & François Rycx, 2012. "Does it pay to be productive? The case of age groups," International Journal of Manpower, Emerald Group Publishing, vol. 33(3), pages 264-283, June.
    4. Thierry Lallemand & François Rycx, 2009. "Are young and old workers harmful for firm productivity?," DULBEA Working Papers 09-02.RS, ULB -- Universite Libre de Bruxelles.
    5. V. Vandenberghe & F. Waltenberg & M. Rigo, 2013. "Ageing and employability. Evidence from Belgian firm-level data," Journal of Productivity Analysis, Springer, vol. 40(1), pages 111-136, August.
    6. van Ours, J.C. & Stoeldraijer, L., 2010. "Age, Wage and Productivity," Discussion Paper 2010-12, Tilburg University, Center for Economic Research.
    7. V. Vandenberghe, 2011. "Boosting the Employment Rate of Older Men and Women," De Economist, Springer, vol. 159(2), pages 159-191, June.
    8. Stoeldraijer, Lenny & van Ours, Jan C, 2010. "Age, wage and productivity," CEPR Discussion Papers 7713, C.E.P.R. Discussion Papers.
    9. Jan Ours & Lenny Stoeldraijer, 2011. "Age, Wage and Productivity in Dutch Manufacturing," De Economist, Springer, vol. 159(2), pages 113-137, June.
    10. 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.
    11. Frosch, Katharina & Göbel, Christian & Zwick, Thomas, 2011. "Separating wheat and chaff: age-specific staffing strategies and innovative performance at the firm level
      [Den Weizen von der Spreu trennen: Altersbezogene Personalpolitik und Innovationen auf der
      ," ZEW Discussion Papers 11-047, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    12. Alessandra Cataldi & Stephan Kampelmann & François Rycx, 2011. "Productivity-Wage Gaps Among Age Groups: Does the ICT Environment Matter?," De Economist, Springer, vol. 159(2), pages 193-221, June.
    13. Pekka Ilmakunnas & Seija Ilmakunnas, 2011. "Diversity at the Workplace: Whom Does it Benefit?," De Economist, Springer, vol. 159(2), pages 223-255, June.
    14. Christian Göbel & Thomas Zwick, 2012. "Age and Productivity: Sector Differences," De Economist, Springer, vol. 160(1), pages 35-57, March.
    15. Thierry Lallemand & François Rycx, 2009. "Are Older Workers Harmful for Firm Productivity?," De Economist, Springer, vol. 157(3), pages 273-292, September.
    16. Thomas Lindh & Bo Malmberg, 2009. "European Union economic growth and the age structure of the population," Economic Change and Restructuring, Springer, vol. 42(3), pages 159-187, August.
    17. Vandenberghe, V., 2013. "Are firms willing to employ a greying and feminizing workforce?," Labour Economics, Elsevier, vol. 22(C), pages 30-46.

    More about this item

    Keywords

    workforce ageing; productivity growth;

    JEL classification:

    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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