Ageing, Productivity and Wages in Austria

ECON Working Paper No. 03/2011

34 Pages Posted: 6 Feb 2012 Last revised: 9 Nov 2012

See all articles by Bernhard Mahlberg

Bernhard Mahlberg

Institute for Industrial Research (IWI); Vienna University of Economics and Business - Institute for Production Management

Inga Freund

University of Vienna - Vienna Institute of Demography

Jesús Crespo Cuaresma

Vienna University of Economics and Business

Alexia Prskawetz

Austrian Academy of Sciences - Vienna Institute of Demography

Multiple version iconThere are 2 versions of this paper

Date Written: August 15, 2011

Abstract

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 labor 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 labor 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.

Keywords: age-productivity, wage profile, employer-employee data, sector affiliation

JEL Classification: J14, J24, J82

Suggested Citation

Mahlberg, Bernhard and Freund, Inga and Cuaresma, Jesus Crespo and Fürnkranz-Prskawetz, Alexia, Ageing, Productivity and Wages in Austria (August 15, 2011). ECON Working Paper No. 03/2011. Available at SSRN: https://ssrn.com/abstract=2000163 or http://dx.doi.org/10.2139/ssrn.2000163

Bernhard Mahlberg (Contact Author)

Institute for Industrial Research (IWI) ( email )

Mittersteig 10/4
Vienna, 1050
Austria
+43 1 513 44 11 0 (Phone)
+43 1 513 44 11 2099 (Fax)

HOME PAGE: http://www.iwi.ac.at/

Vienna University of Economics and Business - Institute for Production Management ( email )

Welthandelsplatz 1
Building D2, Entrance C, 3rd floor
Vienna, 1020
Austria
+43 1 313 36 - 5615 (Phone)

HOME PAGE: http://https://www.wu.ac.at/en/prodmanengl/

Inga Freund

University of Vienna - Vienna Institute of Demography ( email )

Prinz Eugenstr. 8-10
Vienna, 1040
Austria

Jesus Crespo Cuaresma

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
Vienna, Wien 1020
Austria

Alexia Fürnkranz-Prskawetz

Austrian Academy of Sciences - Vienna Institute of Demography ( email )

Prinz Eugenstr. 8-10
Vienna, 1040
Austria

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