Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 14: Rates of Depreciation of Human Capital Due to Nonuse

Siv Gustafsson
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Siv Gustafsson: Research Institute of Industrial Economics (IFN)

Abstract: How important for success on the job is uninterrupted labor force participation? Data on labor force status for a 15 year period for individual salaried employees in Swedish Industry makes possible the estimation of the effect of years of experience and years of non-experience on earnings. One result is that both women and men experience salary decreases by labor force interruptions. However, net investment during non-experience years found to be positive, women as well as men return to the labor market with a larger amount of human capital after the interruption than before the interruption.

Keywords: Human capital; Wage

JEL-codes: J24; J31

22 pages, August 1977

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