Ageing and Employers' Perceptions of Labour Costs and Productivity: A Survey Among European Employers
Netherlands Interdisciplinary Demographic Institute (NIDI)
Hendrik P. Van Dalen
Tilburg University, Center and Faculty of Economics and Business Administration; Netherlands Interdisciplinary Demographic Institute (NIDI)
Netherlands Interdisciplinary Demographic Institute
February 17, 2012
Netspar Discussion Paper No. 02/2012-013
Purpose: This paper examines employers’ perceptions of changes of the labour cost-productivity gap due to the ageing of the workforce, the effects of tenure wages and employment protect ion on the perceived gap and whether a perceived labour cost-productivity gap affects employers’ recruitment and retention behaviour towards older workers.
Methodology: We analyze surveys administered to employers in Denmark, France, Germany, Italy, the Netherlands, Poland and Sweden.
Findings: Approximately half of the employers associate the ageing of the personnel staff with a growing gap between labour costs and productivity. Both the presence of tenure wages and employment protection rules increase the probability that employers perceive a widening labour cost–productivity gap due to the ageing of their workforce. A counterfactual shows that even when employment protection and tenure wage systems are abolished 40 percent of the employers expect a net cost increase. The expected labour cost-productivity gap negatively affects both recruitment and retention of older workers.
Originality: The wage-productivity gap is examined by the perceptions of employers using an international comparative survey.
Number of Pages in PDF File: 35
Keywords: Older workers, labour costs, labour productivity, ageing, employers, tenure, seniority wages, retirement
JEL Classification: -working papers series
Date posted: April 27, 2012
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