Firm productivity, workforce age and vocational training in Austria

Bernhard Mahlberg, Austrian Institute for Industrial Research
Inga Freund, Vienna Institute of Demography
Alexia Fuernkranz-Prskawetz, Vienna Institute of Demography

In most industrialized countries the economic output will be achieved by a smaller and older labor force in the future, which is accompanied by a change in the quantity and composition of human capital. From a firm level point of view human capital investment is less common for the elderly workforce due to lower learning capabilities and less time till retirement. Recent literature has concentrated on the effect of workforce ageing and the effect of continuing vocational training (CVT) on productivity separately. Controlling for training effort at the firm level as well as firm-specific characteristics we assess the relation between a firm’s productivity level and the age composition of its employees using a unique dataset for Austria. Our aim is to test whether the hump-shaped age profile of the employees’ age structure on labor productivity that we found in previous studies is robust once we control for training intensity.