Age and Labor Productivity in Manufacturing | Munich Center for the Economics of Aging - MEA
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Macroeconomic Implications of Demographic Change

Age and Labor Productivity in Manufacturing

Demographic change will bring in its wake a massive aging of manpower over the next 20 years. Against this background, we have set out to explore the relation between worker age and labor productivity. For this, we have compiled a unique data from a truck assembly plant owned by a large German car manufacturer with plants in Asia, Europe and the U.S. At this plant, trucks are assembled by work teams on an assembly line. We have selected this plant because it features a taylorized production process typical for the manufacturing industry, and because it stacks our cards against finding flat or increasing productivity with age. Compared to many service-sector jobs, productivity in this plant requires more physical strength, dexterity, agility etc. (which tend to decline with age) than experience and knowledge of the human nature (which tend to increase with age). These data permit us to overcome the above-mentioned methodological problems in an unprecedented way. The data have three innovative elements. First, we measure productivity in an assembly line environment in which the time to produce a unit of output is as standardized as the quality of the final product. As the assembly line has the same speed for all work teams and the design of the trucks is pre-defined, more productive work teams are not able to produce more or better output than less productive work teams. Workers, however, make errors which are detected at end control. More productive work teams differ from less productive work teams only in the errors they make. We therefore use the number and severity of production errors during the assembly process as a precise and well-observed measure of productivity. We exploit the daily variation in the team composition of work teams over four years to identify the age-productivity profiles. Second, we have merged the daily production error data (almost 1000 days) with longitudinal personnel data (3,800 workers in 100 work teams). This permits us to hold a broad range of workers’ characteristics constant. In addition, and most importantly, by differencing out worker-workplace fixed effects we are able to correct for the selection effects marring so many earlier studies due to the endogeneity of early retirement and team composition. Third, we measure the joint productivity of workers in a work team. This takes into account the individual workers’ contribution to their co-workers’ productivity. Particularly the contribution of older workers may be underestimated if productivity is measured at an individual level. Examples for such potential contributions to a team’s productivity are the instruction of younger workers, being relaxed in tense or hectic situations, and contributing positively to the work climate. We think that our approach solves the major aggregation problems in earlier studies. Our results are striking. Due to the very large number of observations and our identification strategy, we are able to estimate rather precise age-productivity profiles at the individual level and at the level of a work team. These profiles do not show a decline in the relevant age range between 25 and 65 years of age. On the individual workers’ level, our average productivity measure actually increases monotonically up to age 65. This project has been successfully completed with a paper published in the Journal of the Economics of Aging.
Ansprechpartner
csm_MWeiss2_4092588d19

Prof. Dr. Matthias Weiss

Finanzierung

MEA Grundmittel

Hans-Böckler-Stiftung

Vorträge
20.09.2012
Prof. Dr. Matthias Weiss
Demographische Entwicklungen verstehen
19.02.2013
Prof. Dr. Matthias Weiss
Demografischer Wandel und die Wirtschaft
06.06.2013
Prof. Dr. Matthias Weiss
Produktivität Älterer
08.03.2013
Prof. Dr. Matthias Weiss
Produktivität in alternden Gesellschaften: Mikro‐ und Makroperspektive
27.06.2013
Prof. Dr. Matthias Weiss
Produktivität in einer alternden Gesellschaft
05.11.2014
Prof. Dr. Matthias Weiss
Age and Productivity in Work Teams: Evidence from Manufacturing and Services
16.11.2014
Prof. Dr. Matthias Weiss
Discussion of Vandenberghe: "Assessing the role of ageing, feminising and better-educated workforces on TFP growth"
14.06.2013
Prof. Dr. Matthias Weiss
Der Demografische Wandel und die Wirtschaft: Was kommt auf uns zu? Was können wir tun?
12.09.2013
Prof. Dr. Matthias Weiss
Age and Productivity: Evidence from car manufacturing and financial services
23.01.2014
Prof. Dr. Matthias Weiss
Podiumsdiskussion "Herausforderung oder Überforderung? Der demografische Wandel in Alltag und Arbeit"
31.03.2014
Prof. Dr. Matthias Weiss
Productivity in Aging Societies
Publikationen

Börsch-Supan, Axel; Weiss, Matthias (2016): "Productivity and age: Evidence from work teams at the assembly line". In: The Journal of the Economics of Ageing, 7, S. 30-42.

Weiss, Matthias (2013): "Erfahrung kompensiert nachlassende Fähigkeiten. Optimistische Befunde aus der Altersforschung. Interview". In: Personalführung.

Ilmakunnas, Pekka; Skirbekk, Vegard; van Ours, Jan; Weiss, Matthias (2009): "Ageing and Productivty", In: Garibaldi, P. (ed.), Health, Longevity, and Productivity, Oxford University Press, Oxford.

Börsch-Supan, Axel; Düzgün, Ismail; Weiss, Matthias (2008): "Labor Productivity in an Aging Society", In: Broeders, D.; Eijffinger (ed.), Frontiers in Pension Finance, Edward Elgar, Cheltenham.

148-2008
Börsch-Supan, Axel; Weiss, Matthias: "Productivity and age: Evidence from work teams at the assembly line".

Pressespiegel
16.07.2019 Prof. Dr. h.c. Axel Börsch-Supan, Ph. D.

Older Employees Breathe New Life Into Europe’s Labor Market

04.03.2018 Prof. Dr. h.c. Axel Börsch-Supan, Ph. D.

"Ältere werden Forderungen stellen"

17.08.2018

Schneller, höher, stärker: Wie produktiv sind ältere Menschen?

18.12.2018 Prof. Dr. h.c. Axel Börsch-Supan, Ph. D.

Trabalhadores mais velhos mantêm produtividade

22.12.2018 Prof. Dr. h.c. Axel Börsch-Supan, Ph. D.

Trabalhadores mais velhos mantêm produtividade, aponta pesquisa

25.08.2019

Is An Aging Population Hurting The U.S. Economy?

09.02.2019 Prof. Dr. h.c. Axel Börsch-Supan, Ph. D.

Arbeitsmarkt: Warum Firmen ältere Arbeitnehmer hofieren sollten

23.02.2019 Prof. Dr. h.c. Axel Börsch-Supan, Ph. D.

Do not worship the Cult of Youth. Do enjoy the wit and wisdom of age!

19.03.2019

Neue Chancen für die Generation 50 plus

22.11.2019 Prof. Dr. h.c. Axel Börsch-Supan, Ph. D.

Produktivität: Unterschätzt die Alten nicht!