Does it pay to be productive ?The case of age groups

Alessandra Cataldi (), Stephan Kampelmann and Francois Rycx

No 11-10, DULBEA Working Papers from ULB -- Universite Libre de Bruxelles

Abstract: Using longitudinal matched employer-employee data for the period 1999-2006, we investigate the relationship between age, wage and productivity in the Belgian private sector. More precisely, we examine how changes in the proportions of young (16-29 years), middle-aged (30-49 years) and older (more than 49 years) workers affect the productivity of firms and test for the presence of productivity-wage gaps. Results (robust to various potential econometric issues, including unobserved firm heterogeneity, endogeneity and state dependence) suggest that workers older than 49 are significantly less productive than prime age and young workers. In contrast, the productivity of middle-age workers is not found to be significantly different compared to young workers. Findings further indicate that average hourly wages within firms increase significantly and monotonically with age. Overall, this leads to the conclusion that young workers are paid below their marginal productivity while older workers appear to be “overpaid” and lends empirical support to theories of deferred compensation over the life-cycle (Lazear, 1979).

Keywords: Wages; productivity; aging; matched panel data (search for similar items in EconPapers)
JEL-codes: J14 J24 J31 (search for similar items in EconPapers)
Pages: 37 p.
Date: 2011-08-18
New Economics Papers: this item is included in nep-bec, nep-dem, nep-eff and nep-hrm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published by:

Downloads: (external link)
https://dipot.ulb.ac.be/dspace/bitstream/2013/95816/1/11-10.pdf 11-10 (application/pdf)

Related works:
Journal Article: Does it pay to be productive? The case of age groups (2012)
Working Paper: Does It Pay to Be Productive? The Case of Age Groups (2011)
Working Paper: Does it pay to be productive ?The case of age groups (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:dul:wpaper:2013/95816

Ordering information: This working paper can be ordered from
http://hdl.handle.ne ... ulb.ac.be:2013/95816

Access Statistics for this paper

More papers in DULBEA Working Papers from ULB -- Universite Libre de Bruxelles Contact information at EDIRC.
Bibliographic data for series maintained by Benoit Pauwels ().