Is innovative firm behavior correlated with age and gender composition of the workforce? Evidence from a new type of data for German enterprises

Abstract

This empirical research note documents the relationship between composition of a firm's workforce (with a special focus on age and gender) and its performance with respect to innovative activities (outlays and employment in research and development (R&D)) for a large representative sample of enterprises from manufacturing industries in Germany using unique newly available data. We find that firms with a higher share of older workers have significantly lower proportions of R&D outlays in total revenues and of This paper is part of the project KombiFiD -Kombinierte Firmendaten für Deutschland that is financially supported by the German Ministry for Education and Research (BMBF). It is a joint project of the Institute of Economics of Leuphana University Lueneburg, the research data centres of the German Federal Statistical Office and the statistical offices of the German federal states, the Institute of Employment Research of the Federal Employment Agency and the research department of the German Central Bank. While members of the KombiFiD-team from all institutions contributed to the construction of the data set used in this paper we alone are responsible for the study presented here and the conclusions drawn. We thank Alexander Vogel for help with the data and two reviewers for helpful comments. For details on how to access the KombiFiD data see www.kombifid.de. To facilitate replication the Stata do-file is available from the authors on request. Pfeifer thanks the VolkswagenStiftung for financial support. R&D employment in total employment, whereas firms with a higher share of female employment seem to be more active in R&D.

A Comparison of the Performance of Majority Female-Owned and Majority Male-Owned Small and Medium-Sized Enterprises.

“…The better performance of majority female-owned SMEs in manufacturing, accommodation and food services, and retail trade may be explained by the higher proportion of female employees in these industries. This explanation is confirmed by Pfeifer and Wagner (2014), who found that firms in German manufacturing industries with a higher share of female employees were more likely to be innovative.…”

The hiring and employment of older workers in Germany: a comparative perspective

“…Goebel and Zwick (2012) also find no significant age-productivity profiles once the endogeneity of the age structure of the workforce is taken into account by GMM estimates. Pfeifer and Wagner (2014a) obtain for manufacturing firms a positive concave age-productivity profile. Productivity increases until age 30 and does not significantly change afterwards.…”

“…These employer provided pensions have been shown to reduce fluctuations in personnel (Rabe 2005;Schnabel and Wagner 2001) and to increase worker engagement (Bossler 2015). Finally, even though the age structure of the workforce may have little influence on productivity, a higher share of older workers appears to be associated with reduced profitability of German firms (Pfeifer and Wagner 2014a). Altogether, these facts suggest that deferred compensation plays an important role in the functioning of the labor market for older workers in Germany.…”

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“…The balance of evidence on the relationship between age and innovation decisively points to a negative connection. Pfeifer and Wagner (2012) record a strong adverse impact of average age on several innovationlinked indicators. Schubert and Andersson (2015) find the age of an individual to be negatively related to their innovation performance, and Arntz and Gregory (2014) show that 17 of the gap in regional innovation performance in Germany is explained by demographic aging.…”