Does Employing Older Workers Affect Workplace Performance?

Bryson A, Forth J, Gray H, and Stokes L |   | IZA Institute of Labor Economics | Sep 2019

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The ageing population and growing labour force participation by older people means there is a shift in the age profile of those supplying their labour to employers in almost all developed economies (OECD, 2019). In the UK, for instance, there have been sharp increases in economic activity rates among those aged 55 or more over the past two decades (George et al, 2013) and much of the recent growth in employment has been in this age group (ibid.).

These trends are expected to continue, with one in three working-age adults expected to be aged 50 or more by 2022. Whilst the United States has had legislation which outlaws discrimination on the basis of age since the late 1960s, most countries in Europe have been slow to tackle such prejudice.

The UK government, for its part, introduced legislation to outlaw age discrimination in employment in 2010 and removed the default retirement age of 65 in 2011. In recent years, it has engaged in a series of campaigns to challenge stereotypes and to emphasise the potential business benefits to employers of employing older workers and of adopting flexible approaches to work and retirement (Department for Work and Pensions, 2007, 2017).

The latest of these campaigns has set an explicit target of getting 1 million more older people into employment by 2022: the equivalent of an average employer increasing their number of older employees by 12 per cent (Business in the Community, 2017). That such campaigns should be needed reflects residual uncertainties among some employers about the net benefits of employing older workers. In this paper we examine the relationship between the age composition of the workforce and workplace performance.