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Workforce Ageing and Labour Productivity in Europe

Author

Listed:
  • Iñigo Calvo-Sotomayor

    (Department of Strategy and Information Systems, University of Deusto, 48007 Bilbao, Spain)

  • Jon Paul Laka

    (Department of Quantitative Methods, University of Deusto, 48007 Bilbao, Spain)

  • Ricardo Aguado

    (Department of Economics, University of Deusto, 48007 Bilbao, Spain)

Abstract

This article analyses the influence of workforce ageing on labour productivity in Europe. This question is relevant because of the impact it may have on economic activity, social security systems sustainability and the wellbeing of the population. The method applied is a quantitative contrast using the panel data technique for 24 countries in the period 1983–2014. This research is framed in the open conversation in the literature on the possible impact of ageing on productivity and takes as reference the seminal work of James Feyrer and the contrast model developed by Shekhar Aiyar, Christian Ebeke, and Xiaobo Shao. The results obtained show how a 1% increase in the workforce between the ages of 55 and 64 is related to a decrease of the annual increase in productivity between −0.106% and −0.479%. The main contribution of the article is to provide, as far as the authors are aware, the first evidence of this negative relationship for the period 1983–2014, in addition to suggesting that the influence of ageing on productivity may be reduced by the evolution of the economies in question toward capital and/or knowledge-intensive sectors.

Suggested Citation

  • Iñigo Calvo-Sotomayor & Jon Paul Laka & Ricardo Aguado, 2019. "Workforce Ageing and Labour Productivity in Europe," Sustainability, MDPI, vol. 11(20), pages 1-16, October.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:20:p:5851-:d:278907
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    2. Miao Zhang & Shibing You & Li Zhang & Houli Zhang & Yukun Wang, 2023. "Dynamic Analysis of the Effects of Aging on China’s Sustainable Economic Growth," Sustainability, MDPI, vol. 15(6), pages 1-16, March.
    3. Osathanunkul, Rossarin & Dumrong, Pasinee & Yamaka, Woraphon & Maneejuk, Paravee, 2023. "The nonlinear impacts of aging labor and government health expenditures on productivity in ASEAN+3 economies," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 450-470.
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    7. Yoshihiko Kadoya & Mostafa Saidur Rahim Khan & Somtip Watanapongvanich & Punjapol Binnagan, 2020. "Emotional Status and Productivity: Evidence from the Special Economic Zone in Laos," Sustainability, MDPI, vol. 12(4), pages 1-15, February.
    8. Iñigo Calvo-Sotomayor & Ekhi Atutxa & Ricardo Aguado, 2020. "Who Is Afraid of Population Aging? Myths, Challenges and an Open Question from the Civil Economy Perspective," IJERPH, MDPI, vol. 17(15), pages 1-17, July.
    9. Antonio Mihi-Ramirez & Elias Melchor-Ferrer & Yolanda Garcia-Rodriguez, 2022. "Why Do Regions Differ in Growth? The Productivity of the Eurozone and Its Contribution to the Added Value of Its European Neighbors," Sustainability, MDPI, vol. 14(18), pages 1-18, September.
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