Employee age and experience as determinants of new-firm survival: evidence from Turkish matched employer-employee data

Abstract

This paper studies how the prior experience and age composition of a startup's founding workforce jointly shape its survival, using matched employer-employee data covering the universe of Turkish firms from 2007 to 2023. We estimate discrete-time hazard models on manufacturing corporations. Our central finding is that the founding workforce's pre-entry experience is a powerful and robust predictor of survival: a workforce drawn from the same sector, from older and more established former employers, and from a concentrated set of prior employers (shared organizational routines) significantly lowers exit risk. Crucially, experience and age do not act independently. The exit penalty of an inexperienced workforce is concentrated among firms staffed by the very young, while the survival value of an older workforce depends on the quality of the employers its members came from. Age does not simply proxy for experience; it conditions which kind of experience matters-its mere presence for the young, its source and quality for the old-so that age and experience act as complements through distinct channels. Consistent with this, the apparent inverted-U relationship between average employee age and survival is driven by the tails of the age distribution rather than a smooth gradient, and both the age and experience effects are concentrated in micro-firms (1-10 employees) and fade as firms age. For larger firms, capital intensity, export orientation, and supply-chain linkages dominate. These results reposition the founding workforce-and the interplay of its experience and age-at the center of new-firm survival, with implications for policies supporting firm longevity in developing economies.