Are older workers overpaid? A literature review

Paul de Hek, Daniël van Vuuren

Research output: Contribution to journalArticleScientificpeer-review

10 Citations (Scopus)


It is widely believed that wage and productivity profiles of individual workers do not coincide at all ages. We give an overview of the theories which provide a rationale for this, and discuss the empirical literature. Human capital theories typically imply that wages rise with tenure, so that job reallocation at old age would imply a wage cut. Incentive theories typically imply that wages exceed productivity at the end of a worker’s career. Bargaining power of unions may also lead to ‘overpayment’ of older workers. Some general conclusions regarding the wages of older workers are formulated on basis of the authors’ reading of the empirical literature.
Original languageEnglish
Pages (from-to)436-460
JournalInternational Tax and Public Finance
Issue number4
Publication statusPublished - 2011
Externally publishedYes


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