Different Productivities of Older Workers depending on Conditions

The Economic and Labour Relations Review 29 (4): pp. 521-542 DEC 2018

38 Pages Posted: 5 Jul 2016 Last revised: 21 Dec 2018

See all articles by Bokwon Lee

Bokwon Lee

Korea Advanced Institute of Science and Technology (KAIST)

Joowoong Park

Korea Advanced Institute of Science and Technology (KAIST)

Jae-Suk Yang

Korea Advanced Institute of Science and Technology (KAIST)

Date Written: April 10, 2018

Abstract

In this paper, we examined the effect of workforce aging on company productivity. We found that an increase in the ratio of workers aged over 50 years to total workers had a negative effect on value added per worker, which was consistent with the findings of most previous studies based on European data. The results of an analysis including various classifications such as size, industry, and several financial conditions revealed that an increase in the ratio of older workers had positive effects on value added per worker in large manufacturing firms under risky or growing conditions. As the productivity of older workers may vary, future research may determine under what conditions – size, industry, region, and financial conditions – older workers contribute positively to productivity. Firms with financial troubles or those planning to downsize should be cautious to lay off older workers to improve organizational performance because these workers contribute positively to productivity under certain conditions.

Keywords: Aging, Productivity, Financial conditions, Firm size, Human Capital

Suggested Citation

Lee, Bokwon and Park, Joowoong and Yang, Jae-Suk, Different Productivities of Older Workers depending on Conditions (April 10, 2018). The Economic and Labour Relations Review 29 (4): pp. 521-542 DEC 2018, Available at SSRN: https://ssrn.com/abstract=2804599 or http://dx.doi.org/10.2139/ssrn.2804599

Bokwon Lee

Korea Advanced Institute of Science and Technology (KAIST) ( email )

373-1 Kusong-dong
Yuson-gu
Taejon 305-701, 130-722
Korea, Republic of (South Korea)

Joowoong Park

Korea Advanced Institute of Science and Technology (KAIST) ( email )

373-1 Kusong-dong
Yuson-gu
Taejon 305-701, 130-722
Korea, Republic of (South Korea)

Jae-Suk Yang (Contact Author)

Korea Advanced Institute of Science and Technology (KAIST) ( email )

291 Daehak-ro
Yuseong-gu
Daejeon, 34141
Korea, Republic of (South Korea)

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