Does It Pay To Be Productive? The Case Of Age Groups

Date Added: Aug 2011
Format: PDF

Using longitudinal matched employer-employee data for the period 1999-2006, the authors investigate the relationship between age, wage and productivity in the Belgian private sector. More precisely, they examine how changes in the proportions of young (16-29 years), middle-aged (30-49 years) and older (more than 49 years) workers affect the productivity of firms and test for the presence of productivity-wage gaps. Results (robust to various potential econometric issues, including unobserved firm heterogeneity, endogeneity and state dependence) suggest that workers older than 49 are significantly less productive than prime age and young workers.