Aging, Labor Turnover and Firm Performance

Ilmakunnas PekkaMaliranta Mika

We study whether older workers are costly to firms. Our estimation equations are derived from a variant of the decomposition methods frequently used for measuring micro-level sources of industry productivity growth. By using comprehensive linked employer-employee data from the Finnish business sector, we study the productivity and wage effects, and hence the profitability effects, of hiring and separation of younger and older workers. The evidence shows that separations of older workers are profitable to firms, especially in the manufacturing ICT-industries. Robustness checks include the use of regional labor supply and other variables as instruments for the potential endogeneity of the labor flows.

Publication info

Series
Discussion Papers no. 1092
Date
2007
Keywords
aging, productivity, wage, profits, hiring, separation, employer-employee data
Avainsanat
ikääntyminen, tuottavuus, palkka, voitot, rekrytoinnit, irtisano(utu)miset, työntekijä-työnantaja-aineisto
Jel
C43,J23,J24,J63,M51
Pages
40
Price
10 €
Language
English