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Technological Progress and the Wage Growth of Older Japanese Workers

Declining birth and mortality rates are leading to population aging throughout the OECD countries. This paper examines one possible consequence for national productivity – we ask: Are older workers able to take advantage of new technologies as effectively as their younger counterparts? Using Japanese data for 1973-2000, we find that if we ignore job tenure, workers beyond the age of 50 do not seem as able to benefit from total factor productivity growth as their younger colleagues. However, Japanese workers past age 50 move to lesser paying positions more frequently than is common elsewhere, and we believe that the complete answer to our question depends upon whether an inability to keep up with new technologies induces late-in-career job changes or whether the changes follow, in practice, from other factors.