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Estimating a firm's age-productivity profile using the present value of workers' earnings

Jagadeesh Gokhale and Laurence Kotlikoff

No 9119, Working Papers (Old Series) from Federal Reserve Bank of Cleveland

Abstract: In hiring new workers, risk-neutral employers equate the present expected value of each worker's compensation to the present expected value of higher productivity, Data detailing how present expected compensation varies with the age of hire embed, therefore, information about how productivity varies with age. This paper infers age-productivity profiles using data on the present expected value of earnings of new hires of a Fortune 1000 firm. For each of the five occupation/sex groups considered, productivity falls with age, with productivity exceeding earnings for young workers and vice versa for older workers.

Keywords: Wages; Labor productivity (search for similar items in EconPapers)
Date: 1991
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Journal Article: Estimating a Firm's Age-Productivity Profile Using the Present Value of Workers' Earnings (1992) Downloads
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