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Causal effects of subsidized career breaks

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Author Info
Nordström Skans, Oskar () (IFAU - Institute for Labour Market Policy Evaluation)
Lindqvist, Linus () (IFAU - Insitute for Labour Market Policy Evaluation)

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Abstract

The paper uses a quasi-experimental situation to analyze the effects of career interruptions on future labor market outcomes. Data are generated by a Swedish program that granted career breaks to applicants until funds where exhausted. Comparing approved and declined (due to lack of funds) applications allows us to derive “pure” effects of interrupted career that are not confounded by selection or omitted variables. The results show no significant effects on working hours but give some support for increased retirement probabilities among the oldest workers. The average wage effect is negative and in the order of 3 percent 1–2 years after the break. Further evidence suggests that one reason for the large negative wage effects may be related to changes in jobs and tasks.

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Publisher Info
Paper provided by IFAU - Institute for Labour Market Policy Evaluation in its series Working Paper Series with number 2005:17.

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Length: 40 pages
Date of creation: 30 Jun 2005
Date of revision:
Handle: RePEc:hhs:ifauwp:2005_017

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Postal: Labour Market Policy Evaluation, P O Box 513, SE-751 20 Uppsala, Sweden
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Related research
Keywords: Career interruptions; labor supply; wages; natural experiment;

Other versions of this item:

Find related papers by JEL classification:
J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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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 & Gustavsson, Magnus, 2004. "Time Out of Work and Skill Depreciation," Working Paper Series 2004:14, Uppsala University, Department of Economics. [Downloadable!]
    Other versions:
  2. Nordström Skans, Oskar, 2004. "Scarring effects of the first labour market experience: A sibling based analysis," Working Paper Series 2004:14, IFAU - Institute for Labour Market Policy Evaluation. [Downloadable!]
  3. David T. Ellwood, 1982. "Teenage Unemployment: Permanent Scars or Temporary Blemishes?," NBER Chapters, in: The Youth Labor Market Problem: Its Nature, Causes, and Consequences, pages 349-390 National Bureau of Economic Research, Inc. [Downloadable!]
  4. Imbens, Guido W & Angrist, Joshua D, 1994. "Identification and Estimation of Local Average Treatment Effects," Econometrica, Econometric Society, vol. 62(2), pages 467-75, March. [Downloadable!] (restricted)
    Other versions:
  5. Datta Gupta, Nabanita & Smith, Nina, 2002. "Children and Career Interruptions: The Family Gap in Denmark," Economica, London School of Economics and Political Science, vol. 69(276), pages 609-29, November. [Downloadable!] (restricted)
    Other versions:
  6. Waldfogel, Jane, 1998. "Understanding the "Family Gap" in Pay for Women with Children," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 137-56, Winter. [Downloadable!] (restricted)
  7. Christopher J. Ruhm, 1998. "The Economic Consequences Of Parental Leave Mandates: Lessons From Europe," The Quarterly Journal of Economics, MIT Press, vol. 113(1), pages 285-317, February. [Downloadable!] (restricted)
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  8. Ashenfelter, Orley C, 1978. "Estimating the Effect of Training Programs on Earnings," The Review of Economics and Statistics, MIT Press, vol. 60(1), pages 47-57, February. [Downloadable!] (restricted)
  9. Eliason, Marcus & Storrie, Donald, 2004. "The Echo of Job Displacement," Working Papers in Economics 135, Göteborg University, Department of Economics. [Downloadable!]
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  10. Larsson, Laura & Lindqvist, Linus & Nordström Skans, Oskar, 2005. "Stepping-stones or dead-ends? An analysis of Swedish replacement contracts," Working Paper Series 2005:18, IFAU - Institute for Labour Market Policy Evaluation. [Downloadable!]
  11. Gregg, Paul, 2001. "The Impact of Youth Unemployment on Adult Unemployment in the NCDS," Economic Journal, Royal Economic Society, vol. 111(475), pages F626-53, November. [Downloadable!] (restricted)
  12. 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:
  13. Heckman, James J & Borjas, George J, 1980. "Does Unemployment Cause Future Unemployment? Definitions, Questions and Answers from a Continuous Time Model of Heterogeneity and State Dependence," Economica, London School of Economics and Political Science, vol. 47(187), pages 247-83, August. [Downloadable!] (restricted)
  14. Shoba Arun & Thankom Arun & Vani Borooah, 2004. "The effect of career breaks on the working lives of women," Feminist Economics, Taylor and Francis Journals, vol. 10(1), pages 65-84, March. [Downloadable!] (restricted)
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. 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!]
  2. Larsson, Laura & Lindqvist, Linus & Nordström Skans, Oskar, 2005. "Stepping-stones or dead-ends? An analysis of Swedish replacement contracts," Working Paper Series 2005:18, IFAU - Institute for Labour Market Policy Evaluation. [Downloadable!]
  3. Bertil Holmlund & Qian Liu & Oskar Nordström Skans, 2006. "Mind the Gap? Estimating the Effects of Postponing Higher Education," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
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