Scandinavian Working Papers in Economics
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Department of Economics, Uppsala University Working Paper Series, Department of Economics, Uppsala University

No 2006:17:
Mind the Gap? Estimating the Effects of Postponing Higher Education

Bertil Holmlund (), Qian Liu () and Oskar Nordström Skans ()

Abstract: This paper estimates the effects on earnings of “gap years” between high school and university enrollment. The effect is estimated by means of standard earnings functions augmented to account for gap years and a rich set of control variables using administrative Swedish data. We find that postponement of higher education is associated with a persistent and non-trivial earnings penalty. The main source of the persistent penalty appears to be the loss of work experience after studies. The reduction of lifetime earnings associated with two years postponement of higher education amounts to 40-50 percent of annual earnings at age 40.

Keywords: timing of education; schooling interruptions; returns to work experience; (follow links to similar papers)

JEL-Codes: I23; J24; J31; (follow links to similar papers)

33 pages, August 15, 2006

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This paper is published as:
Holmlund, Bertil, Qian Liu and Oskar Nordström Skans, (2008), 'Mind the Gap? Estimating the Effects of Postponing Higher Education', Oxford Economic Papers., Vol. 60, No. 4, pages 683-710

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