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Time Out of Work and Skill Depreciation

Per-Anders Edin () and Magnus Gustavsson ()

No 2004:14, Working Paper Series from Uppsala University, Department of Economics

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 (search for similar items in EconPapers)
JEL-codes: J13 J24 J31 J69 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mon and nep-rmg
Date: 2004-09-28
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Published in Industrial and Labor Relations Review, 2008, pages 163-189.

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Related works:
Journal Article: Time Out of Work and Skill Depreciation (2008) Downloads
Working Paper: Time out of work and skill depreciation (2005) Downloads
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