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Ilmakunnas et al.

Ilmakunnas et al.

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Ilmakunnas et al.

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  1. Discussion ofAgeing and Productivity Ilmakunnas et al. Etienne Wasmer (Sc. Po. Paris)

  2. Introduction 1 • Really interesting piece • a general framework • relations between age and absenteism • age and working capacity • age and productivity at the plant level • Some policy implications

  3. Introduction 2 • 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

  4. 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”

  5. In short: implications for most aspects of labor economics This discussion • Couple of general remarks • Enlight conclusions and policy • Two conjectures

  6. 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.

  7. 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

  8. 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

  9. 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…)

  10. Endogeneity of skill maintenance decisions

  11. Labor market theory of this curve Productivity Wage RA for FRDB Author for FRDB Discussant for FRDB Coordinator for FRDB

  12. 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…

  13. 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?

  14. 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?

  15. 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.

  16. Open issue: stress at the workplace and p.r.