Are older workers overpaid? A literature review

Daniel van Vuuren and Paul de Hek ()

No 165, CPB Discussion Paper from CPB Netherlands Bureau for Economic Policy Analysis

Abstract: It is widely believed that wage and productivity profiles of individual workers do not coincide at all ages. We give an overview of the theories which provide a rationale for this, and discuss the empirical literature. Human capital theories typically imply that wages rise with tenure, so that job reallocation at old age would imply a wage cut. Incentive theories typically imply that wages exceed productivity at the end of a worker's career. Bargaining power of unions may also lead to 'overpayment' of older workers. Some general conclusions regarding the wages of older workers are formulated on the basis of the authors' reading of the empirical literature.

JEL-codes: J24 J31 J33 J51 J62 (search for similar items in EconPapers)
Date: 2010-12
New Economics Papers: this item is included in nep-age, nep-hrm and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Journal Article: Are older workers overpaid? A literature review (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:cpb:discus:165

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