Premium
WORKFORCE AGEING AND THE SUBSTITUTION OF LABOUR: THE ROLE OF SUPPLY AND DEMAND OF LABOUR IN AUSTRIA
Author(s) -
Prskawetz Alexia,
Fent Thomas
Publication year - 2007
Publication title -
metroeconomica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.256
H-Index - 29
eISSN - 1467-999X
pISSN - 0026-1386
DOI - 10.1111/j.1467-999x.2007.00262.x
Subject(s) - economics , productivity , workforce , labour supply , imperfect , labour economics , substitution (logic) , ageing , macroeconomics , economic growth , computer science , programming language , linguistics , philosophy , genetics , biology
We study the sensitivity of projected economic productivity (output per worker) with respect to alternative projections of labour supply and alternative assumptions on the substitutability of workers at different ages. We show that in a pure labour economy assuming imperfect substitution of workers at different ages implies an increase in relative productivity during the next two decades. For a decreasing or hump‐shaped age‐specific productivity profile a negative tradeoff between an increasing labour force at older ages and aggregate productivity results. A decline in productivity can be attenuated by adjusting labour force participation rates to levels currently observed in Nordic countries.