Summary Previous literature has suggested both positive and negative effects of age diversity on labor productivity: positive because of the potential knowledge complementarities between employees of different ages and negative because of the age‐related value differences that might reduce cohesion and cooperation, hampering firm performance. Using a Belgian sample of 5892 organizational observations (2008–2011), we unraveled these countervailing effects in two ways. First, we built on prior studies to suggest that the effect of age diversity depends on the particular shape of the age distribution: positive when it is heterogeneous (i.e., variety) and negative when it is polarized (i.e., polarization). This was supported by our findings. Second, we explored the moderating impact of two contextual contingencies, firm size and job security. As expected, the positive effect of age variety is reinforced in large firms and in firms where job security is high. Although firm size also emphasizes the negative effect of age polarization on productivity, job security, unexpectedly, does not moderate this relationship. Our study offers a valuable contribution to the literature as it reveals the boundary conditions of the competing implications of age diversity and, thus, allows one to account for the inconclusive findings reported in previous literature. Copyright © 2015 John Wiley & Sons, Ltd.
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