Workforce Age and Innovation: A Literature Survey

Abstract

The relationship between age and creative performance has been found to follow a hump-shaped profile in the arts and sciences, and in great technological achievement. Accordingly, accelerating workforce aging raises concern about whether future capacity to innovate is endangered. This paper provides a literature survey and critical discussion of existing studies exploring the effects of age on innovative performance, both at the individual and the firm level. However, as individual-level evidence and some of the firm-level studies are of purely cross-sectional nature, the existing results have to be interpreted with caution owing to the presence of selectivity biases and unobserved heterogeneity. Studies at the aggregate level of firms address some of these issues. In particular, the scarce longitudinal evidence reveals that it is very likely that older workers fare much better in innovation than previous cross-sectional evidence suggests. Moreover, up to now, the literature survey does not find conclusive evidence that a youth-centred human resource strategy (always) fosters innovation. Apart from integrating the existing empirical evidence on different levels of aggregation, a strong focus of this paper is on methodological challenges in the empirical study of workforce age and innovation and it aims to offer a sound conceptual and methodological basis for further studies in this field of management research.