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Age and Gender Composition of the Workforce, Productivity and Profits: Evidence from a New Type of Data for German Enterprises

  • Pfeifer, Christian

    ()

    (Leuphana University Lüneburg)

  • Wagner, Joachim

    ()

    (Leuphana University Lüneburg)

This empirical paper documents the relationship between composition of a firm's workforce (with a special focus on age and gender) and its performance (productivity and profitability) for a large representative sample of enterprises from manufacturing industries in Germany. We use unique newly available data that for the first time combine information from the statistics of employees covered by social security that is aggregated at the enterprise level and information from enterprise level surveys performed by the Statistical Offices. Our micro-econometric analysis confirms previous findings of concave age-productivity profiles, which are consistent with human capital theory, and adds a new finding of a rather negative effect of age on firms' profitability, which is consistent with deferred compensation considerations. Moreover, our analysis reveals for the first time that the ceteris paribus lower level of productivity in firms with a higher share of female employees does not go hand in hand with a lower level of profitability in these firms. If anything, profitability is (slightly) higher in firms with a larger share of female employees. This finding might indicate that lower productivity of women is (over)compensated by lower wage costs for women, which might be driven by general labor market discrimination against women.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6381.

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Length: 38 pages
Date of creation: Feb 2012
Date of revision:
Publication status: published in: Contemporary Economics, 2014, 8 (1), 25-49
Handle: RePEc:iza:izadps:dp6381
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  1. Chad Syverson, 2011. "What Determines Productivity?," Journal of Economic Literature, American Economic Association, vol. 49(2), pages 326-65, June.
  2. on Exports and Productivity, The International Study Group, 2007. "EXPORTS AND PRODUCTIVITY - comparable evidence for 14 countries," Working Paper Series in Economics and Institutions of Innovation 110, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  3. Lucia Foster & John Haltiwanger & Chad Syverson, 2008. "Reallocation, Firm Turnover, and Efficiency: Selection on Productivity or Profitability?," American Economic Review, American Economic Association, vol. 98(1), pages 394-425, March.
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  5. 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.
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  7. Grund, Christian & Westergård-Nielsen, Niels, 2005. "Age Structure of the Workforce and Firm Performance," Working Papers 05-10, University of Aarhus, Aarhus School of Business, Department of Economics.
  8. Vincent VANDENBERGHE, 2011. "Boosting the employment rate of older men and women," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2011010, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
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  11. Benoit Dostie, 2006. "Wages, Productivity and Aging," Cahiers de recherche 0645, CIRPEE.
  12. Mahmut Yasar & Carl H. Nelson & Roderick Rejesus, 2003. "Productivity and Exporting Status of Manufacturing Firms: Evidence from Quantile Regressions," Emory Economics 0323, Department of Economics, Emory University (Atlanta).
  13. International Study Group on Exports and Productivity (ISGEP), 2008. "Understanding Cross-Country Differences in Exporter Premia: Comparable Evidence for 14 Countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 144(4), pages 596-635, December.
  14. Jin-Tan Liu & Meng-Wen Tsou & Ping Wang, 2010. "Workforce Composition And Firm Productivity: Evidence From Taiwan," Economic Inquiry, Western Economic Association International, vol. 48(4), pages 1032-1047, October.
  15. Lazear, Edward P, 1979. "Why Is There Mandatory Retirement?," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1261-84, December.
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  17. Ana Cardoso & Paulo Guimarães & José Varejão, 2011. "Are Older Workers Worthy of Their Pay? An Empirical Investigation of Age-Productivity and Age-Wage Nexuses," De Economist, Springer, vol. 159(2), pages 95-111, June.
  18. Thierry Lallemand & François Rycx, 2009. "Are Older Workers Harmful for Firm Productivity?," De Economist, Springer, vol. 157(3), pages 273-292, September.
  19. Göbel, Christian & Zwick, Thomas, 2011. "Age and productivity: Sector differences?," ZEW Discussion Papers 11-058, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  20. Joachim Wagner, 2010. "Estimated capital stock values for German manufacturing enterprises covered by the cost structure surveys," Working Paper Series in Economics 171, University of Lüneburg, Institute of Economics.
  21. Vincenzo Verardi & Christophe Croux, 2009. "Robust regression in Stata," Stata Journal, StataCorp LP, vol. 9(3), pages 439-453, September.
  22. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1.
  23. Jan Ours & Lenny Stoeldraijer, 2011. "Age, Wage and Productivity in Dutch Manufacturing," De Economist, Springer, vol. 159(2), pages 113-137, June.
  24. Julia I. Lane & John C. Haltiwanger & James Spletzer, 1999. "Productivity Differences across Employers: The Roles of Employer Size, Age, and Human Capital," American Economic Review, American Economic Association, vol. 89(2), pages 94-98, May.
  25. Thierry Lallemand & Robert Plasman & François Rycx, 2003. "Intra-firm wage dispersion and fîrm performance: a review and empirical tests on Belgian data," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 46(4), pages 5-30.
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