Stephan Veen

Positive effects of ageing and age diversity in innovative companies – large‐scale empirical evidence on company productivity

This paper investigates how age diversity within a companyOs workforce affects company productivity. It introduces a theoretical framework that helps to integrate results from a broad disciplinary spectrum of ageing and diversity research to derive empirically testable hypotheses on the effects of age diversity on company productivity. It argues that first the balance between costs and benefits of diversity determines the effect of age diversity on company productivity and that second the type of task performed acts as a moderator. To test these hypotheses, it uses a large-scale employer-employee panel data set (the LIAB.) Results show that increasing age diversity has a positive effect on company productivity if and only if a company engages in creative rather than routine tasks.

Effect of Workforce Age on Quantitative and Qualitative Organizational Performance: Conceptual Framework and Case Study Evidence

Field studies linking workforce age to performance treat performance as one-dimensional and often focus on individual not organizational performance. To analyze the effects of workforce age on organizational performance, we suggest treating performance as multi-dimensional with at least two output dimensions: quantity and quality. We provide a novel conceptual framework that borrows insights from multiple disciplines to better understand ageing phenomena in organizations. In particular, we build on psychological and medical studies showing that individual age has different effects on different cognitive capabilities. As a result, we argue that workforce ageing may affect various performance dimensions, such as quantity and quality, in different, often opposite ways. In our empirical part we examine a unique dataset containing detailed court data over a time span of 19 years. We find that average workforce age is linked negatively to quantitative organizational performance but positively to qualitative organizational performance. Our findings suggest that future organizational studies should decompose performance at least along the quantity–quality dimension. Our theoretical framework helps to understand the different types of ageing effects and to derive itemized implications for changes in organizational performance. It also helps to reconcile contradictory findings of previous studies and to derive important managerial implications for task assignments, career policies and company strategies in view of upcoming demographic changes in many developed countries.

The Impact of Aging and Age Diversity on Company Performance

We examine how the age structure of a companys workforce affects company performance. Although, the effect of aging on individual productivity has been analyzed frequently, organizational productivity effects, which are more than the sum of individual productivities, have not. Furthermore, we do not only address the effect of changes in average age but also of changes in age diversity on organizational performance. We make a theoretical contribution by introducing a simple economic model to study the effects of workforce heterogeneity on company performance. The model provides a formal structure, i.e. cost and benefit curves, to analyze how changes in age diversity may affect organizational performance. We then break new ground by combining this economic model with theoretical insights and empirical results on aging and diversity from multiple and very diverse disciplines. As a result we derive empirically testable hypotheses which are tested in the empirical section based on a linked employer employee dataset with more than 18.000 German firms and 2 million employees. We find new and innovative results. Although previous research has often found declining individual productivity effects with increasing age, we find that organizational productivity does not necessarily decline with average workforce age, particularly if changes in age diversity and type of tasks are controlled for. We also find that an increase in age diversity can have substantial positive productivity effects, particularly in innovative and creative companies. Our results are not only discussed in terms of statistical significance, but also with respect to economic importance and the consequences of demographic changes on organizational performance.

The Consequences of Central Examinations on Educational Quality Standards and Labour Market Outcomes.

Central examinations—that is, centrally set and marked exams—have often been discussed as an instrument for improving educational outcomes. The aim of our study was to determine whether central exams have an impact not only on educational but also on labour market outcomes. We explain school quality choice through the incentives created by central exams vs. non‐central exams and model the resulting students’ schooling decisions and employers’ wage decisions. We use the German Abitur and the variation among the German federal states with respect to central exams as a quasi‐experimental design for alternative educational quality regimes. As hypothesised from our theoretical analysis, the percentage of Abitur holders increases more quickly in quality regimes without central exams than with central exams. However, as theoretically expected in the case of a pooled labour market, the wage premium decreases not only for Abitur‐holders without central exams but also for all Abitur‐holders. This is due to the quality deterioration in the states without central exams which spills over into a pooled labour market. Thus, graduates from states with central exams and higher educational standards ‘pay’ for the quality deterioration of educational standards in states without central exams.

Aging Workforces and Challenges to Human Resource Management in German Firms

The aim of this paper is to provide an overview of the main challenges imposed by demographic change on the human resource management (HRM) policies of German companies. Although many more aspects of business are affected by demographic change, such as changes in consumption or in savings and investment and therefore in capital costs, we concentrate on changes in personnel policies prompted by an aging workforce. We cover a wide range of HRM policies, starting with recruitment problems, moving on to training issues, wages and incentives, and end with problems concerning innovation and technological change.