Age Structure of Employment and Wages. An Analysis Across Occupational Groups

Abstract

Recently, in most developed economies, the average age of the workforce has
been growing rapidly. Therefore, the questions arise how will it affect the level
of wages and the shape of age-productivity and age-wage profiles.
The aim of the paper is to analyse the relationship between changes in the age
structure of the employment and wages of individuals in minor occupational
groups. Using individual data from the Structure of Earnings Survey in
Poland in 2006-2014 we created an unique database of individual wages and
the characteristics of employed in occupational groups at 3-digit level of
classification. In our analysis we used an extended version of Mincerian wage
model where both the characteristics of employees (education, work tenure, age,
gender, and type of employment contract) and employers (size and ownership
sector) were taken into account.
The results for the whole sample indicate a significant and negative relationship
between the proportion of older workers in employment in a given occupational
group and individual wages. However, when the analyses were performed
separately for each of the 1-digit occupational groups, the results varied
significantly. In those groups where knowledge and qualifications of employees
are more important than physical strength had to be updated permanently, an
increase in the number of the older workers raises the average wages.