Working Paper Series, Department of Economics, Uppsala University
No 2004:14:
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 a
unique longitudinal dataset, the Swedish part of the International Adult
Literacy Survey, we are able to analyze changes in literacy skills for
individuals as a function of time out of work. In general, we find
statistically strong evidence on a negative relationship between work
interruptions and skills. Our analysis suggests that depreciation of
general (literacy) skills is economically significant. Our estimates imply
that a full year of non-employment is associated with skill losses that are
equivalent to moving 5 percentiles down the skill distribution.
Keywords: Work interruptions; Skill depreciation; Unemployment; Wage differentials; (follow links to similar papers)
JEL-Codes: J13; J24; J31; J69; (follow links to similar papers)
29 pages, September 28, 2004
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- This paper is published as:
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Edin, Per-Anders and Magnus Gustavsson, (2008), 'Time Out of Work and Skill Depreciation', Industrial and Labor Relations Review, Vol. 61, pages 163-189
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