With the Lunch Seminar series, the Department of Finance is bringing eminent and up-and-coming researchers from around the world to Luxembourg.
Abstract:
How does workforce aging affect corporate investment? We investigate this question using comprehensive matched employer-employee data. Exploiting variation in the age of newly hired workers, we find that firms hiring older workers significantly boost capital investment. Specifically, a one-year increase in the average age of new hires increases investment rates by 1.6 percentage points–a 13% increase relative to the sample mean. To establish causality, we implement a shift-share instrumental variable approach that leverages industry-level demographic trends interacted with firms' initial workforce composition. Our results are consistent with a model where firms optimally choose between hiring younger and older workers who differ in productivity and wages.
More about Prof. Hadja: Jakub Hajda - Google Scholar
The seminar will be held in person.
