1. Work and Productivity Group 3 London GA Meeting 11 June 2012 Professor Peter Nolan Professor Mikko Harma

2. Core Themes Productivity Employment systems and work-life participation Sustainable work and well-being Work organisation and management Societal choices and consequences

3. Age, productivity and pay Are older workers more or less productive than their younger counterparts? Given that more people are working unpaid after the age of 65, how are we to interpret traditional measures of production and productivity? Measuring productivity has proved difficult, but the growth of post - 65 unpaid work provides an unimpeachable case for fresh thinking. Focusing on paid work, do employers exclude older workers on the assumption that their higher wages and constant or diminishing productivity levels lift unit costs? Conversely, does the accumulation of (knowledge) capital over the life-course boost older workers’ productivity and cut costs at the margin? Many (economic) models assume ubiquitous internal labour markets with seniority wages, but this is almost certainly an empirically suspect point of departure after 30 years of employment restructuring. There is a fragile economic consensus that age-productivity profiles are described by an inverse L- shape function over the life-course. But there is no consensus (and virtually no research) on age- unit cost profiles. Taking account of changes in the management of the employment relationship and wider structural changes is a key theoretical and empirical challenge and requires a fresh research initiative. The existing models do not have traction and the data are tired.

4. Productivity cont. Is labour productivity determined by the character and conduct of employees, or by the jobs that people do? Supply side policy perspectives emphasising human capital acquisition - the idea that a individuals’ skills and competences dictate productivity prior to entering a job - have dominated policy mind sets. But there is a compelling case for new research on structural, institutional and demand side variables. What do employers do? And what is the significance of technological changes? Changes in occupational structure – a move from high to low value, low wage service jobs -may constrain and construct productivity irrespective of age, effort, initiative and skill. The age- productivity-pay nexus may thus prove highly sensitive to the distribution of older workers by occupation, industry and sector. The tendency towards skill biased technological change and the concomitant polarisation of labour markets throughout Europe raises a raft of new and complex issues. We require new research is required to elucidate the complex connections. Our restricted understanding of demographic productivity dynamics is a severe constraint on informed policy choices. Should public investment, for example, be directed at the employability of the ageing workforce or focused on measures to assist the employment of the fast increasing mass of excluded young people?

5. Employment systems and work-life participation A focus on job content, productivity and employment patterns provides a bridge from the micro dynamics of organisations to the wider institutional conditions of employment. In what ways are older workers integrated into paid work? Aggregate studies of work, productivity and age have focused on (a) the significance of higher dependency ratios and (b) the triggers to retirement. But the significance of differing employment systems (ES) has been neglected. ES describe an ensemble of institutions: labour markets, (legal and voluntary) regulations, work organisation, vocational training, industrial relations and occupational health and safety. ES have been distinguished at national level, but there is limited detailed comparative analysis at the level of specific sectors and occupations. The WG identified significant research gaps with reference to three connected dynamics: – the redrawing of labour market segments (the significance of the transition from prosperity to austerity) – Occupational mobility over the life-course – Job quality

6. Employment systems and work-life participation Polarisation of wage and occupational structures is a salient feature of many EU labour markets, but its significance for the employment of older people has not been investigated. If, as postulated, job gains are occurring mainly in those sectors of the labour market that provide either high or low qualified jobs, with a thinning out of the middle ground of skilled manual work, what are the implications for an increasingly age diverse workforce? What are the consequences of labour market policies on the quality of work? Can policy interventions improve the quality of jobs available to women and younger workers? What are the main underlying factors of current LM segmentation dynamics? Occupational mobility over the life-course may be crucial as many older workers seek refuge from high strain jobs. Addressing issues of labour market segmentation and job quality thus will be critical to societal challenges. Is it possible to identify specific institutional, welfare and regulatory arrangements that better facilitate the employment of older people?

7. Topics 3 and 4 Professor Mikko Harma Sustainable Work and Health Work Organisation and Management

8. Societal Choices and consequences The EU policy agenda to prolong paid working lives, and to sustain historical rates of productivity growth and living standards, is often presented as a set of technical problems. Issues of social conflict and power relations in work organisations and labour markets are neglected. But a grounded scientific treatment would explore the systemic characteristics and stakeholder interests that might inhibit the inclusion of older workers in decent paid work. Better policy formation will follow from a deeper understanding of the `winners and losers’ in the processes of work and employment change Sustainable employment systems may come at a cost: the goals of employment expansion and (productivity driven) cost cutting changes in production and service provision do not always cohere.