Trends in senior workers’ productivity potential

Vegard Skirbekk, International Institute for Applied Systems Analysis (IIASA)
Katharina H. Frosch, Ludwig-Maximilians-University, Munich

Education, cognitive skills, health or job experience differ by age. In this context, previous research suggests an inversely U-shaped relationship between age and productivity. As a consequence, only if the senior workers of tomorrow are substantially more competent than in the past can they substitute for fewer younger workers without hampering their country’s economic performance. This paper highlights past and future trends in senior workers’ productivity potential. Based on both a review of existing studies and an analysis of new empirical evidence, we not only study human capital endowments by age groups over time, but also investigate whether recent cohorts of senior workers are more productive. First results show that senior workers’ productivity potential has considerably improved during the past three decades, particularly among women.