Are Older Workers Worthy of Their Pay? An Empirical Investigation of Age-Productivity and Age-Wage Nexuses

• Type: Article in International Scientific Journal
• Date: 2011

Authors

Ana R Rute Cardoso (Author) Other; Paulo Guimaraes (Author) FEP; Jose Varejao (Author) FEP

Journal

Title: De Economist

Vol. 159 No. 2

Pages: 95-111

ISSN: 0013-063X

Publisher: Springer Nature

Indexing

ISI Web of Knowledge - 53 Citations

ISI Web of Science

Scopus - 60 Citations

Scientific classification

CORDIS: Social sciences > Economics > Labour economics

FOS: Social sciences > Economics and Business

Other information

Authenticus ID: P-002-R4E

DOI: 10.1007/s10645-011-9163-8

Abstract (EN): Using longitudinal employer-employee data spanning over a 22-year period, we compare age-wage and age-productivity profiles and find that productivity increases until the age range of 50-54, whereas wages peak around the age 40-44. At younger ages, wages increase in line with productivity gains but as prime-age approaches, wage increases lag behind productivity gains. As a result, older workers are, in fact, worthy of their pay, in the sense that their contribution to firm-level productivity exceeds their contribution to the wage bill. On the methodological side, we note that failure to account for the endogenous nature of the regressors in the estimation of the wage and productivity equations biases the results towards a pattern consistent with underpayment followed by overpayment type of policies.

Language: English

Type (Professor's evaluation): Scientific

No. of pages: 17