Research: Productivity of Older Workers Decreases with Age, but Decline is Limited

A Dutch labor economist looking at age effects at the individual level by analyzing data on running and publishing in economic journals has concluded that the productivity of older workers indeed decreases with their age, but that the decline is limited, and found no evidence of a pay-productivity gap at higher ages. In "Will You Still Need Me: When I’m 64?" (De Economist), Jan C. Van Ours, of Triburg University, undertook the study to test the perception whether older workers without jobs have a harder time finding one because of A gap between wage and productivity--that is, older workers having a wage that is higher than their productivity.

To shed some light on the relationship between age and productivity I analyzed panel data on individuals and firms. To the extent that running performance represents physical productivity I find evidence of a productivity decline after age 40. To the extent that publishing in economics journals represents mental productivity I do not find evidence of a productivity decline, even after age 50. When measured at the firm level I find little evidence of an increasing pay-productivity gap at higher ages of the workforce.

Van Ours acknowledges that there are limitations of the empirical analysis, but nevertheless believes that while "the potential negative effects of aging on productivity should not be underestimated; they should not be exaggerated either." In particular, there "is no need to worry too much about age-related productivity declines or an age related pay-productivity gap." However, since older workers are not very likely to return to a job after becoming unemployed, he suggests that the labor market position of older workers will remain an area of policy concern.

Sources: SpringerLink Summary (January 9, 2010); PhysOrg.com "Older workers do not necessarily perform worse" (February 12, 2010)

Opinion: Call for More Research on How Older Workers Respond in Actual Working Conditions

Stating that too little is known about how workers manage job demands as they age and begin to lose physical and cognitive abilities., Business Insurance is calling for adequate research into older worker performance conducted in real workplaces, where all the workaday pressures are present. While there is widespread agreement that knowing more about older workers is important for employers, most studies on aging-worker performance have been completed in quiet lab environments where people are asked to complete specific tasks.

That means employers don't know enough about how aging employees are accommodating for declining capabilities. Are they jerry-rigging devices to help them lift loads or creating platforms that help them step over obstacles?

If employers are not directing such accommodations, it is possible individual worker efforts could actually be creating safety hazards for themselves and other employees.

Perhaps there are better ways to accommodate that could increase productivity. Research could help answer such questions.

Source: Business Insurance "Older workers warrant researchers' attention" (February 8, 2010)