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Time out of Work and Skill Depreciation

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Author Info
Per-Anders Edin
Magnus Gustavsson

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Abstract

This paper investigates the role of skill depreciation in the relationship between work interruptions and subsequent wages. Using Swedish data from two waves (1994 and 1998) of the International Adult Literacy Survey, which included results of tests gauging respondents' ability to read and make practical use of printed information, the authors are able to analyze changes in individuals' skills as a function of time out of work. They find statistically strong evidence of a negative relationship between work interruptions and skills. The analysis suggests that depreciation of general skills was economically important. A full year of non-employment, for example, was associated with a 5-percentile move down the skill distribution.

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Publisher Info
Article provided by ILR Review, ILR School, Cornell University in its journal ILR Review.

Volume (Year): 61 (2008)
Issue (Month): 2 (January)
Pages: 163-180
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Handle: RePEc:ilr:articl:v:61:y:2008:i:2:p:163-180

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Edin, Per-Anders & Fredriksson, Peter, 2000. "LINDA - Longitudinal INdividual DAta for Sweden," Working Paper Series 2000:19, Uppsala University, Department of Economics. [Downloadable!]
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  2. Kaestner, Robert & Joyce, Theodore & Wehbeh, Hassan, 1996. "The Effect of Maternal Drug Use on Birth Weight: Measurement Error in Binary Variables," Economic Inquiry, Oxford University Press, vol. 34(4), pages 617-29, October.
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  3. Aigner, Dennis J., 1973. "Regression with a binary independent variable subject to errors of observation," Journal of Econometrics, Elsevier, vol. 1(1), pages 49-59, March. [Downloadable!] (restricted)
  4. Griliches, Zvi & Hausman, Jerry A., 1986. "Errors in variables in panel data," Journal of Econometrics, Elsevier, vol. 31(1), pages 93-118, February. [Downloadable!] (restricted)
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  5. Gibbons, Robert & Katz, Lawrence F, 1991. "Layoffs and Lemons," Journal of Labor Economics, University of Chicago Press, vol. 9(4), pages 351-80, October. [Downloadable!] (restricted)
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  6. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May. [Downloadable!] (restricted)
  7. Pissarides, Christopher A, 1992. "Loss of Skill during Unemployment and the Persistence of Employment Shocks," The Quarterly Journal of Economics, MIT Press, vol. 107(4), pages 1371-91, November. [Downloadable!] (restricted)
  8. Olivier J. Blanchard & Lawrence H. Summers, 1986. "Hysteresis and the European Unemployment Problem," Working papers 427, Massachusetts Institute of Technology (MIT), Department of Economics.
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  9. Angrist, Joshua D. & Krueger, Alan B., 1999. "Empirical strategies in labor economics," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 23, pages 1277-1366 Elsevier. [Downloadable!] (restricted)
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  10. Mincer, Jacob & Polachek, Solomon, 1974. "Family Investment in Human Capital: Earnings of Women," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages S76-S108, Part II, . [Downloadable!] (restricted)
  11. Francine D. Blau & Lawrence M. Kahn, 2001. "Do Cognitive Test Scores Explain Higher US Wage Inequality?," NBER Working Papers 8210, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  12. Pissarides, C., 1990. "Unemployment And The Persistence On Employment Shocks," Papers 377, London School of Economics - Centre for Labour Economics.
  13. Neal, Derek, 1995. "Industry-Specific Human Capital: Evidence from Displaced Workers," Journal of Labor Economics, University of Chicago Press, vol. 13(4), pages 653-77, October. [Downloadable!] (restricted)
  14. Dan Devroye & Richard B. Freeman, 2001. "Does Inequality in Skills Explain Inequality in Earnings Across Advanced Countries?," NBER Working Papers 8140, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  15. Agell, Jonas & Bennmarker, Helge, 2002. "Wage Policy and Endogenous Wage Rigidity: A Representative View from the Inside," Research Papers in Economics 2002:12, Stockholm University, Department of Economics. [Downloadable!]
  16. Blinder, Alan S & Choi, Don H, 1990. "A Shred of Evidence on Theories of Wage Stickiness," The Quarterly Journal of Economics, MIT Press, vol. 105(4), pages 1003-15, November. [Downloadable!] (restricted)
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  17. Agell, Jonas & Bennmarker, Helge, 2002. "Wage policy and endogenous wage rigidity: a representative view from the inside," Working Paper Series 2002:12, IFAU - Institute for Labour Market Policy Evaluation. [Downloadable!]
  18. Albrecht, James W. & Edin, Per-Anders & Sundström, Marianne & Vroman, Susan B., 1996. "Career Interruptions and Subsequent Earnings: A Reexamination Using Swedish Data," Working Paper Series 1996:23, Uppsala University, Department of Economics.
    Other versions:
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Fredriksson, Peter & Johansson, Per, 2004. "Dynamic Treatment Assignment - The Consequences for Evaluations Using Observational Data," IZA Discussion Papers 1062, Institute for the Study of Labor (IZA). [Downloadable!]
  2. Fredriksson, Peter & Johansson, Per, 2002. "Program Evaluation and Random Program Starts," Working Paper Series 2003:1, Uppsala University, Department of Economics. [Downloadable!]
    Other versions:
  3. Berg, Lennart & Berger, Tommy, 2005. "The Q theory and the Swedish housing market –an empirical test," Working Paper Series 2005:19, Uppsala University, Department of Economics. [Downloadable!]
  4. Hesselius, Patrik, 2003. "Does Sick Absence Increase the Risk of Unemployment?," Working Paper Series 2003:15, Uppsala University, Department of Economics. [Downloadable!]
  5. Hägglund, Pathric, 2006. "Are there pre-programme effects of Swedish active labour market policies? Evidence from three randomised experiments," Working Paper Series 2006:2, IFAU - Institute for Labour Market Policy Evaluation. [Downloadable!]
  6. Jie Chen, 2006. "The Dynamics of Housing Allowance Claims in Sweden: A Discrete Time-Hazard Analysis," European Journal of Housing Policy, Taylor and Francis Journals, vol. 6(1), pages 1-29, April. [Downloadable!] (restricted)
    Other versions:
  7. Nordström Skans, Oskar & Lindqvist, Linus, 2005. "Causal effects of subsidized career breaks," Working Paper Series 2005:17, IFAU - Institute for Labour Market Policy Evaluation. [Downloadable!]
  8. Engström, Per & Holmlund, Bertil, 2005. "Worker Absenteeism in Search Equilibrium," Working Paper Series 2005:22, Uppsala University, Department of Economics. [Downloadable!]
    Other versions:
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