Skill Depreciation during Unemployment: Evidence from Panel Data

Jonathan Cohen, Andrew Johnston and Attila S. Lindner

No 31120, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We use a panel of survey responses linked to administrative data in Germany to measure the depreciation of skills while workers are unemployed. Both the reemployment hazard rate and reemployment earnings steadily fall with unemployment duration, and indicators of depression and loneliness rise substantially. Despite this, we find no decline in a wide range of cognitive and noncognitive skills while workers remain unemployed. We find the same pattern in a panel of American workers. The results imply that skill depreciation in general human capital is unlikely to be a major explanation for duration dependence.

JEL-codes: I32 J24 J6 J60 J64 (search for similar items in EconPapers)
Date: 2023-04
New Economics Papers: this item is included in nep-eec, nep-hrm and nep-lma
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