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Ageing, productivity and wages in Austria
Bernhard Mahlberg1, Inga Freund, Jesús Crespo Cuaresma
1Institute for Industrial Research (IWI), Vienna, Austria ; Vienna University of Economics and Business (WU), Vienna, Austria.
Labour Economics
|June 5, 2013
Summary
Workforce ageing does not harm firm productivity. A negative relationship exists between younger workers and labor productivity, particularly in industry and construction sectors.
Area of Science:
- Economics
- Demography
- Sociology
Background:
- Industrialized nations face challenges with aging workforces, impacting economic growth and intergenerational transfers.
- A declining young workforce must support an increasing elderly population, highlighting the need for workforce productivity.
Purpose of the Study:
- To investigate the relationship between employee age structure, labor productivity, and wages in Austrian firms.
- To analyze the impact of workforce demographics on firm performance and earnings.
Main Methods:
- Utilized a matched employer-employee panel dataset for Austrian firms (2002-2005).
- Simultaneously accounted for employee socio-demographic characteristics and firm heterogeneity.
- Examined the correlation between the proportion of older/younger employees and labor productivity/wages.
Main Results:
- Firm productivity is not negatively associated with a higher share of older employees.
- No evidence of older employees being overpaid or any wage association with the proportion of older workers.
- A negative relationship was observed between the share of young employees and both labor productivity and wages, notably in industry and construction.
Conclusions:
- Workforce ageing does not negatively impact firm productivity or wages.
- A higher proportion of young employees may be linked to decreased labor productivity and wages, especially in specific sectors.
- Findings challenge assumptions about the economic impact of an aging workforce and suggest potential productivity benefits from experienced workers.
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