The Impact of Workforce Aging on European Productivity
IMF Working Papers, December 8, 2016
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- The Impact of Workforce Aging on European Productivity
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Bibliographic details
- Authors: Shekhar Aiyar, Christian H Ebeke
- Published: December 8, 2016
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781475559729.001
Key findings
- The age-distribution of Europe’s workforce has shifted towards older workers over the past few decades, a process expected to accelerate in the years ahead.
- Workforce aging reduces growth in labor productivity, mainly through its negative effect on TFP growth.
- Projected workforce aging could reduce TFP growth by an average of 0.2 percentage points every year over the next two decades.
- A variety of policies could ameliorate this effect.
Transmission channels and mechanisms
- Negative effect on total factor productivity (TFP) growth identified as the main channel through which workforce aging reduces labor productivity.
- The paper studies the effect of aging on labor productivity and identifies the main transmission channels (TFP-focused) and examines mitigating policies.
Policy implications and recommendations
- Policies aimed at ameliorating the negative effect of workforce aging on productivity are feasible and important; the paper discusses a variety of such policies (details in full paper).
Subject areas and keywords (as listed)
- Subjects: Aging, Labor, Labor force, Population and demographics, Production, Productivity, Total factor productivity
- Keywords: age group, Aging, aging workforce, effect of workforce, Europe, growth, Labor force, labor market, Policies, Productivity, Total factor productivity, workforce, Workforce Aging, workforce share, workforce skill, workforce training, WP
Shekhar Aiyar and Christian H Ebeke, December 8, 2016.
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- The Impact of Workforce Aging on European Productivity