Papers in Innovation Studies, CIRCLE, Center for Innovation, Research and Competences in the Learning Economy, Lund University
Old is Gold? The Effects of Employee Age on Innovation and the Moderating Effects of Employment Turnover
() and Martin Andersson
Abstract: There is consistent evidence in the literature that
average employee age is negatively related to firm-level innovativeness.
This observation has been explained by older employees working with
outdated technological knowledge and being characterized by reduced
cognitive flexibility. We argue that firms can mitigate this effect through
employee turnover. In particular turnover of R&D workers is deemed a
vehicle for transfer of external knowledge to the firm, which can
compensate for lower cognitive flexibility and up-to-date knowledge among
older workers. We use a matched employer-employee dataset based on three
consecutive CIS surveys for Sweden to test our predictions. Our results
suggest a) that overall employee age impacts negatively on product
innovation activities (both in terms of propensity and success), b) that
the effect of em-ployee staying rate (measured by the share of employees
that remain in the firm from one year to the next) on innovation follows an
inverted U-shape implying an ‘optimal’ level of employment turnover, and c)
that this ‘optimal’ value is lower for firms with older employees. The
latter suggests that firms with older employees can at least partially
compensate an aged workforce by increased employment turnover.
Keywords: ageing; employee age; innovation; firm performance; R&D; human capita; (follow links to similar papers)
JEL-Codes: D22; J21; J24; L25; (follow links to similar papers)
27 pages, November 25, 2013
Before downloading any of the electronic versions below
you should read our statement on
for viewing Postscript files and the
Acrobat Reader for viewing and printing pdf files.
Full text versions of the paper:
Questions (including download problems) about the papers in this series should be directed to Torben Schubert ()
Report other problems with accessing this service to Sune Karlsson ()
or Helena Lundin ().
Design by Joachim Ekebom