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The Impact of Workforce Age Heterogeneity on Company Productivity

  • Uschi Backes-Gellner

    ()

    (Institute for Strategy and Business Economics, University of Zurich)

  • Stephan Veen

    ()

    (Institute for Strategy and Business Economics, University of Zurich)

We analyse how the age structure of a company’s workforce affects company performance using a linked employer employee panel dataset. With demographic changes at hand, this is of utmost importance for firms and organisations. Focussing on the organizational, not the individual level, we examine the effect of changes in age heterogeneity of a company’s workforce on company productivity. Incorporating theoretical insights and empirical results on aging and age diversity from multiple and very diverse disciplines, we conduct a cost-benefit analysis to evaluate how changes in age heterogeneity may affect organizational performance. Our dataset contains more than 18,000 German firms and 2 million employees over 10 years. We find significant effects of age heterogeneity on firm productivity, and that these effects are particularly moderated by type of tasks. There are positive productivity effects of increasing age heterogeneity, but only for companies and workforces conducting innovative or creative tasks.

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Paper provided by University of Zurich, Institute for Strategy and Business Economics (ISU) in its series Working Papers with number 0078.

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Length: 44 pages
Date of creation: Feb 2008
Date of revision: Sep 2009
Handle: RePEc:iso:wpaper:0078
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  14. Alda, Holger & Bender, Stefan & Gartner, Hermann, 2005. "The linked employer-employee dataset of the IAB (LIAB)," IAB Discussion Paper 200506, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  15. Stock, Ruth, 2004. "Drivers of Team Performance: What Do We Know and What Have We Still to Learn?," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 60487, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
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