Age and Productivity - Evidence from Linked Employer Employee Data
Centre for European Economic Research (ZEW); Catholic University of Louvain (UCL)
University of Wuerzburg - Business Administration & Economics; Centre for European Economic Research (ZEW); Maastricht University - Research Centre for Education and the Labour Market (ROA)
ZEW - Centre for European Economic Research Discussion Paper No. 09-020
In most Western, industrialised countries the workforce is ageing rapidly. In order to assess the possible consequences of an ageing workforce, this paper measures the impact of changes in the age structure of establishments on productivity using representative linked employer-employee panel data. We take into account that the levels as well as the changes in the age structure of establishments and their production are likely to be simultaneously determined and apply dynamic GMM methods. We find that establishment productivity increases with the share of employees until the age of 50-55 and only decreases slightly afterwards. Our findings suggest that previous estimations are biased because they either do not take into account endogeneity, time dependencies, or crucial information correlated with age shares and productivity. Large standard deviations point to important variation in the age productivity profile among establishments.
Number of Pages in PDF File: 41
Keywords: ageing workforce, age, productivity, LEED, system GMM
JEL Classification: J11, J14, J21working papers series
Date posted: July 9, 2009
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