The impending shift to an older mix of workers: Perspectives from the management and economics literatures

Abstract

This paper adds a new dimension to the debate in the management literature about the merits or otherwise of employing older workers. Given the reality that we face an older workforce in the coming decades, the paper first reviews the management literature on the implications of an older workforce. This literature points to a range of benefits, and some costs, to businesses of employing older workers. A new dimension to this debate is provided by considering the age mix of a given workforce from the perspective of neoclassical economics. This framework provides us with the notion of an optimum workforce age mix. If an optimum age mix exists, the natural question that arises is: are we likely to move closer or further away from it as the available workforce ages? The paper suggests that an optimum age mix does exist, and early signs are that Australia is moving closer to it as the workforce ages. However, more empirical evidence and analysis is required before we can be confident about this prediction. The paper suggests a way forward in that regard.