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The Age-Productivity Gradient: Evidence from a Sample of F1 Drivers

Aging is a global phenomenon. If older individuals are less productive, an aging working population can lower aggregate productivity, economic growth and fiscal sustainability. Therefore, understanding the age-productivity gradient is key in a aging society. However, estimating the effect of aging on productivity is a daunting task. First, it requires clean measures of productivity. Wages are not such measures to the extent that they reward other workers attributes than their productivity. Second, unobserved heterogeneity at workers, firms and workers/firms level challenges the identification of the age-productivity gradient in cross-sectional data. Longitudinal data attenuate some identification issues, but give rise to the problem of partialling out the effect of aging from the pure effect of time. Third, the study of the age-productivity link requires investigating the role of experience and of seniority. We tackle these issues by focussing on a sample of Gran Prix Formula One drivers and show that the age-productivity link has an inverted U-shape profile, with a peak at around the age of 30-32.

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Paper provided by Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy in its series CSEF Working Papers with number 226.

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Date of creation: 01 May 2009
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Publication status: Published in Labour Economics, 2011, Volume 18, Issue 4, pp. 464-473
Handle: RePEc:sef:csefwp:226
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  1. Tullio Jappelli & Mario Padula & Luigi Pistaferri, 2005. "A Direct Test of the Buffer-Stock Model of Saving," CSEF Working Papers 150, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  2. Benoit Dostie, 2006. "Wages, Productivity and Aging," Cahiers de recherche 0645, CIRPEE.
  3. John M. Abowd & Robert H. Creecy & Francis Kramarz, 2002. "Computing Person and Firm Effects Using Linked Longitudinal Employer-Employee Data," Longitudinal Employer-Household Dynamics Technical Papers 2002-06, Center for Economic Studies, U.S. Census Bureau.
  4. Lawrence M. Kahn, 2000. "The Sports Business as a Labor Market Laboratory," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 75-94, Summer.
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  6. Woodcock, Simon, 2006. "Match Effects," MPRA Paper 154, University Library of Munich, Germany.
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  8. Medoff, James L & Abraham, Katharine G, 1980. "Experience, Performance, and Earnings," The Quarterly Journal of Economics, MIT Press, vol. 95(4), pages 703-36, December.
  9. Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," Journal of Political Economy, University of Chicago Press, vol. 70, pages 9.
  10. Ray Fair, 2004. "Estimated Age Effects in Athletic Events and Chess," Yale School of Management Working Papers amz2481, Yale School of Management, revised 01 Aug 2007.
  11. Pekka Ilmakunnas & Mika Maliranta & Jari Vainiomaki, 2000. "The Roles of Employer and Employee Characteristics for Plant Productivity," Econometric Society World Congress 2000 Contributed Papers 1349, Econometric Society.
  12. Lallemand, Thierry & Rycx, Francois, 2009. "Are Young and Old Workers Harmful for Firm Productivity?," IZA Discussion Papers 3938, Institute for the Study of Labor (IZA).
  13. Ray C. Fair, 2004. "Estimated Age Effects in Athletic Events and Chess," Cowles Foundation Discussion Papers 1495, Cowles Foundation for Research in Economics, Yale University, revised Feb 2006.
  14. Haegeland, T. & Klette, T.J., 1998. "Do Higher Wages Reflect Higher Productivity? Education, Gender and Experience Premiums in a Matched Plant-Worker Data Set," Memorandum 24/1998, Oslo University, Department of Economics.
  15. 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.
  16. Klevmarken, N Anders & Quigley, John M, 1976. "Age, Experience, Earnings, and Investments in Human Capital," Journal of Political Economy, University of Chicago Press, vol. 84(1), pages 47-72, February.
  17. Alison L. Booth & Marco Francesconi & Carlos Garcia-Serrano, 1999. "Job tenure and job mobility in Britain," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 53(1), pages 43-70, October.
  18. Brugiavini, Agar & Padula, Mario, 2001. "Too much for retirement? Saving in Italy," Research in Economics, Elsevier, vol. 55(1), pages 39-60, March.
  19. James L. Medoff & Katharine G. Abraham, 1981. "Are Those Paid More Really More Productive? The Case of Experience," Journal of Human Resources, University of Wisconsin Press, vol. 16(2), pages 186-216.
  20. Bruno Crépon & Nicolas Deniau & Sébastien Pérez-Duarte, 2003. "Wages, Productivity and Worker Characteristics : A French Perspective," Working Papers 2003-04, Centre de Recherche en Economie et Statistique.
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