Age, technology and labour Costs

Francesco Daveri and Mika Maliranta

No 2006-EP07, Economics Department Working Papers from Department of Economics, Parma University (Italy)

Abstract: Is the process of workforce aging a burden or a blessing for the firm? Our paper seeks to answer this question by providing evidence on the ageproductivity and age-earnings profiles for a sample of plants in three manufacturing industries (“forest”, “industrial machinery” and “electronics”) in Finland. Our main result is that exposure to rapid technological and managerial changes does make a difference for plant productivity, less so for wages. In electronics, the Finnish industry undergoing a major technological and managerial shock in the 1990s, the response of productivity to age-related variables is first sizably positive and then becomes sizably negative as one looks at plants with higher average seniority and experience. This declining part of the curve is not there either for the forest industry or for industrial machinery. It is not there either for wages in electronics. These conclusions survive when a host of other plausible productivity determinants (notably, education and plant vintage) are included in the analysis. We conclude that workforce aging may be a burden for firms in high-tech industries and less so in other industries.

Keywords: Aging; technology; TFP; wage determination; Finland; new economy; growth (search for similar items in EconPapers)
JEL-codes: D24 E60 J24 J31 (search for similar items in EconPapers)
Pages: 50
Date: 2006
New Economics Papers: this item is included in nep-eff and nep-lab
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Citations: View citations in EconPapers (9)

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Related works:
Working Paper: Age, Technology and Labour Costs (2006)
Working Paper: Age, Technology and Labour Costs (2006)
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