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Mind the gap? Estimating the effects of postponing higher education

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Author Info
Holmlund, Bertil () (Department of Econoics, Uppsala University)
Liu, Qian () (Department of Economics, Uppsala University)
Nordström Skans, Oskar () (IFAU - Institute for Labour Market Policy Evaluation)

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Abstract

This paper estimates the effects on earnings of “gap years” between high school and university enrollment. The effect is estimated by means of standard earnings functions augmented to account for gap years and a rich set of control variables using administrative Swedish data. We find that postponement of higher education is associated with a persistent and non-trivial earnings penalty. The main source of the persistent penalty appears to be the loss of work experience after studies. Two years postponement reduces the present value of life time earnings by 40-50 percent of annual earnings at age 40.

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Publisher Info
Paper provided by IFAU - Institute for Labour Market Policy Evaluation in its series Working Paper Series with number 2006:11.

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Length: 45 pages
Date of creation: 11 Oct 2006
Date of revision:
Publication status: Published in Oxford Economic Papers , 2008.
Handle: RePEc:hhs:ifauwp:2006_011

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Related research
Keywords: timing of education schooling interruptions work experience

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Find related papers by JEL classification:
I23 - Health, Education, and Welfare - - Education - - - Higher Education Research Institutions
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
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. James J. Heckman & Lance J. Lochner & Petra E. Todd, 2005. "Earnings Functions, Rates of Return and Treatment Effects: The Mincer Equation and Beyond," NBER Working Papers 11544, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  2. Blinder, Alan S & Weiss, Yoram, 1976. "Human Capital and Labor Supply: A Synthesis," Journal of Political Economy, University of Chicago Press, vol. 84(3), pages 449-72, June. [Downloadable!] (restricted)
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  3. Comay, Yochanan & Melnik, A & Pollatschek, M A, 1973. "The Option Value of Education and the Optimal Path for Investment in Human Capital," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(2), pages 421-35, June. [Downloadable!] (restricted)
  4. Heckman, James J. & Lochner, Lance J. & Todd, Petra E., 2003. "Fifty Years of Mincer Earnings Regressions," IZA Discussion Papers 775, Institute for the Study of Labor (IZA). [Downloadable!]
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  5. 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)
  6. 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!]
  7. Light, Audrey & Ureta, Manuelita, 1995. "Early-Career Work Experience and Gender Wage Differentials," Journal of Labor Economics, University of Chicago Press, vol. 13(1), pages 121-54, January. [Downloadable!] (restricted)
  8. 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.
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  9. Griliches, Zvi, 1980. " Schooling Interruption, Work While in School and the Returns from Schooling," Scandinavian Journal of Economics, Blackwell Publishing, vol. 82(2), pages 291-303.
  10. V. Joseph Hotz & Lixin Colin Xu & Marta Tienda & Avner Ahituv, 2002. "Are There Returns To The Wages Of Young Men From Working While In School?," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 221-236, May. [Downloadable!] (restricted)
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  11. Altonji, Joseph G, 1993. "The Demand for and Return to Education When Education Outcomes Are Uncertain," Journal of Labor Economics, University of Chicago Press, vol. 11(1), pages 48-83, January. [Downloadable!] (restricted)
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  12. Monks, James, 1997. "The impact of college timing on earnings," Economics of Education Review, Elsevier, vol. 16(4), pages 419-423, October. [Downloadable!] (restricted)
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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. Lundin, Daniela & Mörk, Eva & Öckert, Björn, 2007. "Do reduced child care prices make parents work more?," Working Paper Series 2007:2, IFAU - Institute for Labour Market Policy Evaluation. [Downloadable!]
  2. Pekkarinen, Tuomas & Pekkala, Sari & Uusitalo, Roope, 2006. "Educational policy and intergenerational income mobility: evidence from the Finnish comprehensive school reform," Working Paper Series 2006:13, IFAU - Institute for Labour Market Policy Evaluation. [Downloadable!]
    Other versions:
  3. Bergemann, Annette & van den Berg, Gerard, 2007. "Active labor market policy effects for women in Europe - a survey," Working Paper Series 2007:3, IFAU - Institute for Labour Market Policy Evaluation. [Downloadable!]
    Other versions:
  4. Blomquist, Sören & Christiansen, Vidar, 2007. "Public Provision of Private Goods and Nondistortionary Marginal Tax Rates," Working Paper Series 2007:7, Uppsala University, Department of Economics. [Downloadable!]
    Other versions:
  5. Alexius, Annika & Holmlund, Bertil, 2007. "Monetary Policy and Swedish Unemployment Fluctuations," Working Paper Series 2007:17, Uppsala University, Department of Economics. [Downloadable!]
    Other versions:
  6. Ågren, Martin, 2006. "Prospect Theory and Higher Moments," Working Paper Series 2006:24, Uppsala University, Department of Economics. [Downloadable!]
  7. de Jong, Philip & Lindeboom, Maarten & van der Klaauw, Bas, 2006. "Screening disability insurance applications," Working Paper Series 2006:15, IFAU - Institute for Labour Market Policy Evaluation. [Downloadable!]
    Other versions:
  8. Kjellberg, David & Post, Erik, 2007. "A Critical Look at Measures of Macroeconomic Uncertainty," Working Paper Series 2007:14, Uppsala University, Department of Economics. [Downloadable!]
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This page was last updated on 2008-7-24.

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