Économie et Statistique n° 368 Society - Older Workers and The Labour Market
The Productivity of Older workers: A Preliminary Estimate
On average, wages increase with age. A natural ques-tion, then, is whether the higher wages earned by older workers correspond to higher productivity. The answer to this question is not without its effect on the employ-ability of these older workers. Wage-earner productivity, estimated as the «contribu-tion» made by the different age brackets to business productivity, increases with age through to 40 years old and then levels off. The productivity curve follows the wage curve quite closely. In particular, there is no sub- stantial deviation between wages and productivity,except at the oldest ages (over 55). However, these findings are not very accurate since it is hard to extract causal relations between wage-earner age and business productivity from simple correlations between the structure and production of manpower. In particular, higher percentages of older workers are found in old and fairly inefficient firms and older workers are slower to adjust to productivity shocks. This intro-duces a bias into the productivity estimate, which can only be corrected at the cost of less accurate findings. Moreover, the findings concern solely employed wage earners and not all individuals.