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Ageing, productivity and wages in Austria

  • Mahlberg, Bernhard
  • Freund, Inga
  • Crespo Cuaresma, Jesús
  • Prskawetz, Alexia

The current demographic developments and their consequences for workforce ageing challenge the sustainability of intergenerational transfers and economic growth. A shrinking share of the young workforce will have to support a growing share of elderly, non-working people. Therefore, the productivity of the workforce is central to a sustainable economic future. In order to study the relation between the age structure of employees and labour productivity at the firm level, we use a new matched employer-employee panel data set for Austrian firms spanning the period 2002- 2005. These data allow us to account simultaneously for socio-demographic characteristics of the employees as well as firm heterogeneity to explain labour productivity. Our results clearly show that the age-productivity as well as age-wage profile have a strong industry-specific component. In the service sector, an ageing workforce does not necessarily imply a negative productivity effect. Moreover, we cannot find any evidence for an overpayment of elderly employees.

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Paper provided by Vienna University of Technology, Institute for Mathematical Methods in Economics, Research Group Economics (ECON) in its series ECON WPS - Vienna University of Technology Working Papers in Economic Theory and Policy with number 03/2011.

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Date of creation: 2011
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Handle: RePEc:zbw:tuweco:032011
Contact details of provider: Web page: http://www.econ.tuwien.ac.at/
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  1. repec:dgr:kubcen:200951 is not listed on IDEAS
  2. Abowd, John M. & Kramarz, Francis, 1999. "Econometric analyses of linked employer-employee data," Labour Economics, Elsevier, vol. 6(1), pages 53-74, March.
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