Transcript Discussion Etienne Wasmer

Discussion of
Ageing and Productivity
Ilmakunnas et al.
Etienne Wasmer (Sc. Po. Paris)
Ageing and productivity: comment
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Introduction 1

Really interesting piece
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a general framework
relations between age and absenteism
age and working capacity
age and productivity at the plant level
Some policy implications
Ageing and productivity: comment
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Introduction 2
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Summary of findings
- productivity is multi-dimensional
- effect of age on absenteism is complex and not
monotonic (frequency vs. duration)
- various cognitive and non-cognitive ability vary
differently with age: most decline with age but
some (e.g. verbal ability) increase
- overall, labor market behaviour more important
than age on productivity
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Introduction 3
Why important to know? Several implications
a) for reforms of pension systems, notably
the optimal age of retirement
b) but also for the design of training
policies and even of education policy
(cohort effects; general vs. specific education
and obsolescence rates of skills)
c) and for employability of “seniors”
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In short:
implications for most aspects of labor
economics
This discussion
Couple of general remarks
Enlight conclusions and policy
Two conjectures
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First, a few missing dimensions:
Career mobility. Most of the relation between age
and productivity is determined by changing
occupation or even sectors. Variant of the Roy
model. Verbal skills matter more at a higher level of
hierarchy. Learning skills matter more at a younger
age.
So occupations are a first order determinant of the
age-productivity link.
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 Does
it matter?
 When
estimating a relation between age and
“errors” on the assembly line, potentially an
upward bias: those who commit more
mistakes may be more likely to have no
promotion hence to remain an assembly line
worker
 Literature on peer effects
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 Second
point: gender
– Too politically correct? Are skills and
productivity depreciating faster or not
depending on gender
- In most countries, female workers retirement
age is lower (legal and effective). Could have
been adressed
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Related point: endogeneity issue, related to the
career choices and participation decisions
Most skills are maintained when they are useful and
needed. Time horizon matters a lot
(this is why older persons should play Scrabble as
long as they can, why their skills deteriorate fast
when their spouse dies, why older heads of states
often die one or two years after they resign, etc…)
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Ageing and productivity: comment
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Ageing and productivity: comment
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Ageing and productivity: comment
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
Endogeneity of skill maintenance decisions
Ageing and productivity: comment
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Labor market theory of this curve
Productivity
Wage
RA for
FRDB
Author for
FRDB
Coordinator
for FRDB
Discussant for
FRDB
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A side remark: no mention of life expectancy –
a) cognitive ability and its maintenance impact
on life expectancy
b) statistics easy to find, and thus possible to
draw inference on the end of career of senior
workers by sector, education, country, gender…
Ageing and productivity: comment
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More important
But what would really improve the work is the
missing link between technology and aging
Are IT youth-friendly relative to older workers?
Can we think of IT’s that would instead raise the
relative productivity of senior workers?
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Policy implications
What policy conclusions do we reach?
Do we need to subsidize firms who invest
in
 skills of senior workers, raising their
employability
 IT’s friendly to senior workers?
 What about education?
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Education
“cristallized abilities” are presumably to a large
extent cohort effects.
The generation before us makes no grammatical
mistake and remember many poetries but cannot
plug a PC and are disarmed in the “trial and error”
process of the internet.
A conclusion would be that the construction of
skills is as much a collective effort as an individual
one.
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Ageing and productivity: comment
Open issue: stress at the workplace and p.r.
Stress vs. employment protection
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TU
2.5
IT
PT
GR
SK
PO
GE
AT
CZ
SP
FR
2
UK
BE
HU
SW
IE
1.5
DK
NE
FI
1
1.5
2
2.5
Employment protection (OECD 2004)
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3.5
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