Ageing, Productivity and Wages in Austria

Posted: 4 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 Fürnkranz-Prskawetz

Vienna University of Technology

Multiple version iconThere are 2 versions of this paper

Date Written: October 2, 2012

Abstract

Current demographic developments in industrialized countries 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. Using a new matched employer-employee panel dataset for Austrian firms for the period 2002-2005, we study the relationship between the age structure of employees, labour productivity and wages. These data allow us to account, simultaneously, for both socio-demographic characteristics of employees and firm heterogeneity, in order to explain labour productivity and earnings. Our results indicate that firm productivity is not negatively related to the share of older employees it employs. We also find no evidence for overpayment of older employees. Our results do not show any association between wages and the share of older employees. Furthermore, we find a negative relationship between the share of young employees and labour productivity as well as wages, which is more prevalent in the industry and construction sector.

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 (October 2, 2012). Labour Economics, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2170772

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

Vienna University of Technology ( email )

Wiedner Hauptstraße 8/105--3
Vienna, 1040
Austria

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