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IFAU - Institute for Evaluation of Labour Market and Education Policy Working Paper Series
IFAU - Institute for Evaluation of Labour Market and Education Policy

No 2005:21:
Time out of work and skill depreciation

Per-Anders Edin () and Magnus Gustavsson ()

Abstract: This paper investigates the role of skill depreciation in the relationship between work interruptions and subsequent wages. Using unique longitudinal microdata containing information on the ability to understand and practically employ printed information, we are able to analyze changes in skills for individuals as a function of time out of work. In general, we find statistically strong evidence of a negative relationship between work interruptions and skills. Our analysis suggests that depreciation of general information-processing skills is economically significant, with a full year of non-employment being equivalent to moving 5 percentiles down the skill distribution.

Keywords: Work interruptions; skill depreciation; wage differentials; (follow links to similar papers)

JEL-Codes: J24; J31; (follow links to similar papers)

35 pages, September 1, 2005

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This paper is published as:
Edin, Per-Anders and Magnus Gustavsson, (2008), 'Time out of work and skill depreciation', Industrial and Labor Relations Review, Vol. 61, No. 2, pages 163-180



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