Demographic structure and firm productivity in Austria

We assess the relation between firms' productivity levels and the age composition of the employees using a unique Austrian dataset. We control for firm-specific characteristics (including number of employees, firm type and size) as well as employees' characteristics (including age, length and type of education, gender and marital status). We find a negative productivity effect of the share of older workers (50 years and older) for the whole sample, as well as for small sized firms (irrespective of the economic sector we consider). This is similar to the finding of most employer-employee studies. If we restrict our sample to large sized firms, the age-productivity profile changes. For firms in the mining and manufacturing industries the age structure of the workforce is not significantly related to productivity while for firms in the non-manufacturing sectors the share of younger workers is negatively related to productivity.