Does productivity and creativity decline with age? Certain sections of the economics community believe so. For them the ageing of the population means a stagnant economy. However, the evidence on the productivity of older workers is ambiguous.

The problem has been tackled in two different ways. In the first individual workers are studied. Productivity at different ages is assessed. The alternative is to look at productivity at a firm or factory as the workforce ages.

Individual Level Productivity Assessment

Researchers have looked across all the studies of individual job performance and age. Different researchers have shown different results from this aggregation of data. Some show a positive impact of age on productivity. Other more recent studies have shown no relationship between age and productivity. None seem to show a decline.

The results depend partly on methodological issues. Productivity is difficult to measure. In some settings such as factories and call centres there are objective measures. Error rates and output can be assessed in some detail. In other settings productivity can only be assessed from peers or supervisors. Productivity assessed by peers showed a positive relationship with age in one study. Assessments of those same individuals by supervisors shows a negative age effect. The authors suggest this represents ageist bias by supervisors. Measurement is difficult in many roles.

The second problem is the sample. Over time companies “weed out” the poor performers. Older workers are probably better workers they survived. Even if we can measure productivity what measure of age is the most appropriate? From a hiring point of view chronological age is the easiest. There is a huge diversity of attitudes towards ageing and work. Alternatives would be to use “felt age” or measures of biological age. Researchers suggest a measure of how old a person is perceived to be by their colleagues. This can can influence productivity. Being perceived as young will motivate and perhaps avoid ageism.

Firm or Factory Level Productivity Assessment

At the macro level economists have tried to assess productivity at the firm or factory level. There is limited evidence of any negative relation of productivity and age. In general, they have failed to find any relationship between productivity and age. Many of the issues are the same. Defining productivity at this level can be an issue in collecting data. Productivity can be influenced by so many other factors. Finding the impact of the average worker age is difficult. The sample may be distorted by better older workers.

Fitting the Job to the Person.

The idea of a person-job fit is deeply embedded in human resources management. There are suggestions that productivity will depend on job charcteristics. Job complexity, job experience and organizational tenure can have an impact. Two German studies show that older workers may be more productive in the correct role. In a truck manufacturing plant, there were detailed measures of productivity. Output was fixed by the speed of the production line. However the error rate by different teams varied. They tracked the errors made by teams of different age. Productivity increased year on year until age 65. We don’t know what would happen beyond that. The speed advantage of the younger workers was compensated for by the experience of the older workers in the team.

An insurance office represented a different kind of paper “factory”. There the results depended on the role. Unlike a manufacturing plant there was much more variability in the task. For simple jobs productivity declined with age. These were routine task like data entry. For complex jobs there was no age effect. This included the call centre operation and less complex problem handling. However, for the most challenging intellectual jobs productivity increased year on year with age.

The impact of the correct role is amplified if the individual has tenure within it. This allows them to build up expertise and experience. Both can compensate for any cognitive and indeed physical declines with age. The employee creates “work arounds”.

Re-engineering Individual Jobs

Age brings with it declines in cognitive and physical abilities. These are not universal and there is a huge variability across individuals. Firms do need to recognize these declines in the ergonomics of the jobs that they create. This has a double benefit. It will improve the productivity of the individual. At the same time, it signals that the firm cares about the health and wellbeing of the older worker. Examples include the provision of larger computer screens in the office. Older factory workers may need help with physical tasks to avoid strain.

As the population ages, there will be increasing pressure on firms to keep their older workers. Indeed they will need to hire more. There will be far fewer younger people to recruit. Healthy ageing means that mentally and physically people can continue to work. Work ensures greater financial stability and provides a sense of purpose in life. For firms the problem will be to design appropriate roles and match them to the right older worker.