Scandinavian Working Papers in Economics

Working Paper Series,
Uppsala University, Department of Economics

No 2004:14: Time Out of Work and Skill Depreciation

Per-Anders Edin () and Magnus Gustavsson ()
Additional contact information
Per-Anders Edin: Department of Economics, Postal: Uppsala University, P.O. Box 513, SE-751 20 Uppsala, Sweden
Magnus Gustavsson: Department of Economics, Postal: Uppsala University, P.O. Box 513, SE-751 20 Uppsala, Sweden

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

JEL-codes: J13; J24; J31; J69

29 pages, September 28, 2004

Full text files 

wp2004_14.pdf PDF-file

Download statistics

Published as
Per-Anders Edin and Magnus Gustavsson, (2008), 'Time Out of Work and Skill Depreciation', Industrial and Labor Relations Review, vol 61, pages 163-189

Questions (including download problems) about the papers in this series should be directed to Ulrika Öjdeby ()
Report other problems with accessing this service to Sune Karlsson ().

RePEc:hhs:uunewp:2004_014This page generated on 2024-09-13 22:17:37.