Employee Age and Experience as Determinants on New Firm Survival: Evidence from Turkish Matched Employer–Employee Data

Erol Taymaz () and Kamil Yilmaz ()
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Erol Taymaz: Department of Economics, Middle East Technical University, Ankara, Turkey
Kamil Yilmaz: Department of Economics, Koç University, İstanbul, Turkiye

No 2601, ERC Working Papers from ERC - Economic Research Center, Middle East Technical University

Abstract: This paper investigates the relationship between workforce age composition, prior experience, and firm survival using matched employer–employee data from Turkey spanning 2007 to 2023. Using the universe of Turkish firms from the Entrepreneur Information System (EIS), we estimate discrete-time hazard models on manufacturing corporations and document three main findings. First, the relationship between average employee age and exit risk is non-linear but not smoothly quadratic: exit hazards are significantly elevated only for firms with very young (15–20) or older (45+) workforces, while the 25–40 age range shows no meaningful differences. This challenges the standard inverted-U specification commonly adopted in the literature. Second, this age effect is entirely confined to micro-firms (1–10 employees); for larger firms, capital intensity, export status, and supply-chain linkages dominate survival prospects. Third, prior employment experience of the workforce—measured through sector-specific experience, former employer characteristics, and employment network concentration—significantly predicts survival, especially for smaller firms. The influence of both age and experience variables fades as firms age, consistent with the gradual replacement of entry conditions by accumulated organizational capital. Our results highlight the size-dependent nature of human capital’s role in firm survival and carry implications for policies aimed at supporting new-firm longevity in developing economies.

Keywords: firm survival; startups; employee experience; employee age; human capital; matched employer-employee data (search for similar items in EconPapers)
JEL-codes: L11 L26 L60 M13 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2026-03, Revised 2026-03
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https://erc.metu.edu.tr/sites/erc.metu.edu.tr/files/menu/series26/2601.pdf First version, 2026 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:met:wpaper:2601

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