Are older workers less productive?

In a world of increasingly fluid labor markets, many older workers fear being pushed aside and out of their jobs by younger, more dynamic employees. But is this worry really justified? Are we less productive as we age?

The answer to the question has important implications for how well we can keep older people at work. As I have argued together with Wolfgang Fengler before, we not only live longer and healthier lives, but we also have the potential to work longer.

Yet, this will only happen if we have the right skills and abilities for the job also at old age. It is quite obvious that our body becomes slower and weaker as we grow old – but what about our brain? And even if our body and brain get weaker – does it matter for employers?

Not necessarily. Skills and abilities of older workers are not so much declining as shifting – and smart employers know how to take advantage of the shifting strengths of an aging workforce. First, while physical strength is surely declining with age, for some abilities our bodies actually have a remarkable capability to maintain them – as long as we use them on a regular basis. Grip strength is an excellent example: For the general population, it peaks at age 35 and then declines quickly. Research has shown, though, that for assembly line workers it remains constant until the age of 65.

Second, and even more remarkable, is the capability of our brain to compensate declines in some capabilities with an increase in others. It is true that certain basic and higher-level cognitive functions – notably the speed of information processing and episodic memory – are declining with age. But there are other functions – like semantic memory, language, and speech – that are improving with age. Importantly, for some declining functions, like perception – that is, the ability to hear, sense, and see – there are easy and inexpensive fixes!

But arguably the most important advantage of older people is experience – and we can even observe it in the organizational pattern of the brain itself. In the figure below you can see scans of brain activity in the pre-frontal cortex during a source memory test of three different groups: young people (Young), older low-performing people (Old-low), and older high-performing people (Old-high). Young people primarily use the right hemisphere of the brain, which we know is in charge of processing new information. Interestingly, low-performing older people try to “mimic” the brains of young people, but they fail: the reduced processing speed of older brains cannot keep up with younger brains. High-performing older people, on the other hand, use a different method: they “bilteralize” their brain activity, also activating networks in the left hemisphere of their brains (see figure below).

Figure. Different, but just as good: High-performing old people use both parts of the brain

Source: Taken from S. M. Daselaar and R. Cabeza, “Age-Related Changes in Hemispheric Organization,” in Cognitive Neuroscience of Aging: Linking Cognitive and Cerebral Aging, ed. R. Cabeza, L. Nyberg, and D. C. Park (New York: Oxford University Press, 2004).

Successful older people manage to use their brains differently, and by doing so are doing just as well as younger people. One interpretation is that older people – having a larger set of knowledge – are relying more on their experience when processing new information. Instead of considering all the new information when making a decision, they might extrapolate from past experience, dismissing some new information, but working more efficiently with the information they have and ultimately doing just as well as younger people with more powerful brains. So, young people are indeed able to run faster, but old people know the shortcuts. In the end, at least some older people make it to the finish line just as fast.

Hence, the key is to acknowledge that older people are not necessarily doing worse – they just do things differently.Older people also have markedly different profiles in terms of socio-emotional skills. In general, they do better on conscientiousness, agreeableness, and emotional stability than younger people; while younger people do better on openness to new experiences and extroversion.

Importantly, smart employers are realizing how to take advantage of an aging workforce. In Germany, some employers implemented measures like mixed-age working teams, age-specific tasks, and workplace adjustments for older workers and experienced higher productivity levels of older (and sometimes also younger) workers. On a broader level, there is also evidence that countries with an older workforce start specializing more in the production of goods and services that use so-called age-appreciating skills more intensively. Also, work life is shifting towards white collar work further giving opportunities to seniors. In other words, aging is starting to shift the comparative advantage of countries, but smart employers are able to do business with these shifting strengths, taking advantage of the new skill profiles – and the shortcuts! – offered by their older employees.

This post first appeared on The World Bank’s Eurasian Perspectives Blog. Publication does not imply endorsement of views by the World Economic Forum.

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Author: Johannes Koettl is a Senior Economist with the World Bank’s Social Protection and Labor Global Practice (GSPDR) and a Research Fellow at the Institute for the Study of Labor (IZA).