MPIDR Working Paper

Age and individual productivity: a literature survey

Abstract

This article surveys supervisors’ ratings, work-sample tests, analyzes of employer-employee datasets and other approaches used to estimate how individual productivity varies by age. The causes of productivity variations over the life cycle are addressed with an emphasis on how cognitive abilities affect labor market performance. Individual job performance is found to decrease from around 50 years of age, which contrasts almost life-long increases in wages. Productivity reductions at older ages are particularly strong for work tasks where problem solving, learning and speed are needed, while in jobs where experience and verbal abilities are important, older individuals’ maintain a relatively high productivity level.