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Age, Wage and Productivity

Author

Listed:
  • van Ours, Jan C.

    (Erasmus School of Economics)

  • Stoeldraijer, Lenny

    (Tilburg University)

Abstract

Previous empirical studies on the effect of age on productivity and wages find contradicting results. Some studies find that if workers grow older there is an increasing gap between productivity and wages, i.e. wages increase with age while productivity does not or does not increase at the same pace. However, other studies find no evidence of such an age related pay-productivity gap. We perform an analysis of the relationship between age, wage and productivity using a matched worker-firm panel dataset from Dutch manufacturing covering the period 2000-2005. We find little evidence of an age related pay-productivity gap.

Suggested Citation

  • van Ours, Jan C. & Stoeldraijer, Lenny, 2010. "Age, Wage and Productivity," IZA Discussion Papers 4765, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp4765
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    References listed on IDEAS

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    1. Jan Ours, 2009. "Will You Still Need Me: When I’m 64?," De Economist, Springer, vol. 157(4), pages 441-460, December.
    2. Ilmakunnas, Pekka & Maliranta, Mika, 2007. "Aging, Labor Turnover and Firm Performance," Discussion Papers 1092, The Research Institute of the Finnish Economy.
    3. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2007. "Enhanced routines for instrumental variables/generalized method of moments estimation and testing," Stata Journal, StataCorp LP, vol. 7(4), pages 465-506, December.
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    5. Pekka Ilmakunnas & Mika Maliranta, 2005. "Technology, Labour Characteristics and Wage‐productivity Gaps," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 67(5), pages 623-645, October.
    6. Malmberg, Bo & Lindh, Thomas & Halvarsson, Max, 2005. "Productivity consequences of workforce ageing - Stagnation or a Horndal effect?," Arbetsrapport 2005:17, Institute for Futures Studies.
    7. Benoit Dostie, 2011. "Wages, Productivity and Aging," De Economist, Springer, vol. 159(2), pages 139-158, June.
    8. Vegard Skirbekk, 2004. "Age and Individual Productivity: A Literature Survey," Vienna Yearbook of Population Research, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna, vol. 2(1), pages 133-154.
    9. Göbel, Christian & Zwick, Thomas, 2009. "Age and productivity: evidence from linked employer employee data," ZEW Discussion Papers 09-020, ZEW - Leibniz Centre for European Economic Research.
    10. Judith K. Hellerstein & David Neumark, 2007. "Production Function and Wage Equation Estimation with Heterogeneous Labor: Evidence from a New Matched Employer-Employee Data Set," NBER Chapters, in: Hard-to-Measure Goods and Services: Essays in Honor of Zvi Griliches, pages 31-71, National Bureau of Economic Research, Inc.
    11. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2003. "Instrumental variables and GMM: Estimation and testing," Stata Journal, StataCorp LP, vol. 3(1), pages 1-31, March.
    12. Torbjorn Hacgeland & Tor Jakob Klette, 1999. "Do Higher Wages Reflect Higher Productivity? Education, Gender and Experience Premiums in a Matched Plant-Worker Data Set," Contributions to Economic Analysis, in: The Creation and Analysis of Employer-Employee Matched Data, pages 231-259, Emerald Group Publishing Limited.
    13. Thierry Lallemand & François Rycx, 2009. "Are Older Workers Harmful for Firm Productivity?," De Economist, Springer, vol. 157(3), pages 273-292, September.
    14. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2007. "Enhanced routines for instrumental variables/GMM estimation and testing," CERT Discussion Papers 0706, Centre for Economic Reform and Transformation, Heriot Watt University.
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    More about this item

    Keywords

    wage; productivity; age;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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