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Ageing workforce and productivity of firms in Belgium (AGEPROD)

Research project TA/00/31B (Research action TA)

Persons :

Description :

The overall objective of the research is to try to quantify as accurately as possible the effect of changing the structure of the workforce - particularly his tendency to grow older - on productivity and profitability of firms. It is also to evaluate the intensity of a gap between productivity and labor costs of older workers, which may strongly influence the demand by companies for these workers, and thus their employment rates.

The second phase of the project must be an opportunity to examine more specifically two points:

First, explore the plausibility of a difference between i) men and women and ii) white- and blue-collar workers as to their age-productivity profiles. The research carried out so far has focused on the characteristics of firms that are their size and their sector of activity. At this stage of research, it is desirable to better take into account the characteristics of workers - other than their age - for which we have reliable information. In particular, the comparison white- and blue-collar workers can somehow compensate for the lack of information about the skill levels of workers (a major weakness in our database).

Second, analyze in depth the role of training. At this stage we have established that the aging workforce means lower productivity performance for firms that is not compensated by lower labour costs. And this may adversely affect the demand for older workers. A policy to support old labour demand – aimed at preserving or increasing the employment rate of senior individuals- could require either i) to reform the Belgian wage formation mechanism, in particular seniority-based wage rules ii) introduce labor cost subsidies targeted at senior workers.

However, an increased training effort could also compensate – at the source - the problem of age-related declining productivity . Our empirical strategy to examine this question is to use information gathered in the so-called Social Report (available via Belfirst). We should, first, confirm the existence in Belgium of a causal relationship between the intensity of firm-based training and labour productivity like Daerden, Reed and Van Reenen (2005) for the United Kingdom, or Zwick (2002) for Germany. The second issue is that of the interaction between this training effort and the age structure of firms. This should enable us to determine whether the (potential) positive effects of training on productivity also occur within firms concentrating older workers.

Documentation :

Age des travailleurs et productivité des firmes en Belgique : synthèse    Bruxelles : Politique scientifique fédérale, 2011 (SP2413)
[To download

Vergrijzende werknemers en productiviteit van ondernemingen in België: synthese    Brussel : Federaal Wetenschapsbeleid, 2011 (SP2414)
[To download

Ageing workforce and productivity of firms in Belgium : summary    Brussels : Federal Science Policy, 2011 (SP2415)
[To download

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