Purpose – The purpose of this paper is to examine employers’ perceptions of changes in the labour cost-productivity gap due to the ageing of the workforce, the effects of tenure wages and employment protection on the perceived gap, and whether a perceived labour cost-productivity gap affects employers’ recruitment and retention behaviour towards older workers. Design/methodology/approach – The authors analyse surveys administered to employers in Denmark, France, Germany, Italy, the Netherlands, Poland and Sweden. Findings – Approximately half of employers associate the ageing of the personnel with a growing gap between labour costs and productivity. Both the presence of tenure wages and employment protection rules increase the probability of employers perceiving a widening labour cost-productivity gap due to the ageing of their workforce. A counterfactual shows that even when employment protection and tenure wage systems are abolished, 40 percent of employers expect a net cost increase. The expected labour costproductivity gap negatively affects both recruitment and retention of older workers. Originality/value – In this paper, the wage-productivity gap is examined through the perceptions of employers using an international comparative survey. keywords: Denmark, France, Germany, Italy, The Netherlands, Poland, Sweden, employers, older workers, direct labour costs, employees productivity, ageing
Original languageEnglish
Pages (from-to)629-647
JournalInternational Journal of Manpower
Volume33
Issue number6
DOI
Publication statusPublished - 2012

ID: 96025