Do Older Employees Have a Lower Individual Productivity Potential than Younger Employees?

Abstract We examine the relationship between employees’ age and their individual productivity potential (IPP). IPP is measured by characteristics which are related to skills utilisation at work. Using PIAAC data for 27 European non-European countries, we find that oldest employees have a lower score than middle-aged in 17 of countries. It seems be most demanding workers keep up with younger countries high average skill loss group or level all groups (or both). The significant positive effects formal education absence on many (the level), easier adapt human capital perspective importance signalling theory.