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Age, Wage and Productivity: Does Productivity Decline at the End of Workers Career?

Author

Listed:
  • P. AUBERT

    (Insee)

  • B. CRÉPON

    (Crest)

Abstract

In this study, we provide an estimation of the average age-productivity profile in the French private sector. The relative productivity of groups of workers is estimated through the relationship between a firms productivity and the age structure of its labour force. We find that productivity rises with age up to 40, then remains quite stable afterwards. Our results show no evidence of a significant difference between wage and productivity, unless after 55 in some sectors where the situation is unclear. Our results contradict previous studies on the issue of age, wage and productivity. They suggest that previous estimations of a lower productivity for workers after 50 may reveal a endogeneity bias rather than a true decrease of productivity for older workers. However, this observation only applies to workers who remain in employment. We do not control for eviction of less productive workers.

Suggested Citation

  • P. Aubert & B. Crépon, 2003. "Age, Wage and Productivity: Does Productivity Decline at the End of Workers Career?," Documents de Travail de l'Insee - INSEE Working Papers g2003-06, Institut National de la Statistique et des Etudes Economiques.
    • Handle: RePEc:nse:doctra:g2003-06
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    File URL: https://www.bnsp.insee.fr/ark:/12148/bc6p06zqpv3/f1.pdf
    File Function: Document de travail de la DESE numéro G2003-06
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    More about this item

    Keywords

    Labour productivity; demand for older workers; production functions;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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