Ageing, Productivity and Wages in Austria

Abstract

► We study the relation between the age of employees and productivity as well as wages. ► Firm productivity is not negatively related to the share of older employees. ► We find a negative relationship between the young employees and labour productivity. ► We cannot find any hints for an overpayment of older employees. a b s t r a c t a r t i c l e i n f o Keywords:Age-productivity/-wage profile Employer-employee data Sector affiliation 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.

Short Notice, Big Difference? The Effect of Temporary Employment on Firm Competitiveness across Sectors

“…It is now standard in the literature on the productivity and wage effects of labour heterogeneity (see, e.g. Cardoso et al 2011;Garnero et al 2014a;Göbel and Zwick 2012;Mahlberg et al 2013).…”

Selected Aspects of Age Management as a Challenge for Polish Entrepreneurs

“…Good and comprehensive age management not only increases the potential of older employees, but it also leads to its efficient utilisation. International research (Magd, 2003;Reday-Mulvane, 2005;Mahlberg et al, 2013) shows that the immobile age of employees did not have a negative influence on the efficiency of their work and, consequently, on the efficiency of enterprise operations (depending on the specific nature of performed work). Therefore, the need to change the attitude toward older people as quickly as possible and counteract the harmful stereotype saying that this group is socially useless and constitutes a burden to the society has been noticed.…”

Aging and income convergence in Europe: A survey of the literature and insights from a demographic projection exercise

“…Lallemand and Rycx (2009) find in their analysis of Belgian firm-level data that changes in the age-structure of the workforce have differing effects for ICT and non-ICT firms. For Austria, the results of Mahlberg et al (2013) show that both the age-productivity as well as age-wage profile have a very strong sector-specific component. The lack of robust effects across studies indicates that there is large uncertainty concerning how the aging process in the EU will affect labor productivity changes and thus its convergence paths across European countries.…”

“…In particular, the availability of matched employer-employee data for many European countries has opened the door to new quantitative contributions where differences in the age distribution of workers across establishments provide the necessary signal to measure the effect of age structure on labor productivity. Göbel and Zwick (2012) for Germany, Malmberg et al (2008) for Sweden, Lallemand and Rycx (2009) for Belgium or Mahlberg et al (2013) for Austria are representative studies of this branch of the literature. Studies assessing age-productivity profiles using similar methods for EU11 economies do not exist to our knowledge.…”