Age Diversity and Innovation: Do mixed teams of old and experienced and young and restless employees foster companies innovativeness?

Our paper sheds light on the impact of age diversity on the likelihood of a company to create product or process innovations. Based on our analysis of the Linked Employer-Employee-Data from the Institute for Employment Research (IAB) over the 2009-2013 period, we focus on different indicators of age diversity within a company’s workforce (variety, separation and disparity). We find that a rise in the average age of a company's workforce has a negative impact on innovation, but age diversity measured by the standard deviation of age or the average age gap increases the probability of a company to create innovations. In addition, the uniformity of the age distribution does not affect innovativeness. Different results for age and tenure diversity suggest a higher importance of generalised human capital for creativity processes compared to company-specific knowledge gained during employment within a company.