Ageing Labour and Firm Productivity: Evidence from Austrian Register Data

Isabel Gerstner , Vienna Institute of Demography
Alexia Fürnkranz-Prskawetz, TU Wien

Austria, as most industrialized countries, is facing rapid population ageing. Amid this demographic process and technological transformation, questions of productivity, labour market dynamics, and economic resilience have gained significant relevance. An older workforce poses challenges for both the social security system and the hopes of continuing economic growth. While older workers bring valuable experience and firm-specific knowledge, they may face difficulties adapting to new technologies — raising questions about their role in a changing economy. It is, however, the technological advancements in which many countries put their hopes to countervail some of the potential negative effects an ageing workforce brings, when it comes to competitiveness on the global market. This paper therefore studies how workers´ age composition is related to firm-level productivity, and how this effect may depend to technology. The main data source is the Austrian register data, which captures all firms operating and all individuals residing in Austria, therefore covering firms and individuals that may otherwise be underrepresented in surveys. Starting with canonical fixed effects models, a Bayesian approach will cast a more nuanced perspective on this increasingly relevant societal question, while acknowledging that uncertainty may be substantial in some self-reported firm characteristics. It is the intersection between the disciplines of economics and demography that is rapidly gaining importance for pressing societal questions of our time. Therefore, this study will help support Austrian policy makers and society to make decisions for an inclusive and resilient labour market.

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 Presented in Session 109. Ageing and the Future of Productivity