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Labour Productivity, Real Wages, and Workforce Age Structure

Adam Tipper
Development, Environment, Satellites, and Strategy
Statistics New Zealand
P O Box 2922, Wellington, New Zealand

info@stats.govt.nz 

Abstract

This paper examines the role of workforce age structure on real wages, labour productivity, and the productivity-real wage gap in New Zealand across the period 2001–2007. Using an industry-level approach, no significant differences between labour productivity and workforce age structure are found. This result holds under a range of sensitivity tests: however, real wages for younger workers are significantly lower. The productivity-real wage gap does not generally hold for older workers, but the data provides some evidence that younger workers are paid less than their productivity would warrant. This, in turn, suggests that seniority wage schemes are not typically present in New Zealand, and that focus should be given to how wages are set for younger workers.

pdf icon. Labour Productivity, Real Wages, and Workforce Age Structure (PDF, 18 pages, 464 kb)

 

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