IDEAS home Printed from https://ideas.repec.org/a/aea/aecrev/v112y2022i11p3725-62.html
   My bibliography  Save this article

Human Capital Depreciation and Returns to Experience

Author

Listed:
  • Michael Dinerstein
  • Rigissa Megalokonomou
  • Constantine Yannelis

Abstract

Human capital can depreciate if skills are unused. But estimating human capital depreciation is challenging, as worker skills are difficult to measure and less productive workers are more likely to spend time in nonemployment. We overcome these challenges with new administrative data on teachers' assignments and their students' outcomes, and quasi-random variation from the teacher assignment process in Greece. We find significant losses to output, as a one-year increase in time without formal employment lowers students' test scores by 0.05 standard deviations. Using a simple production model, we estimate a skill depreciation rate of 4.3 percent and experience returns of 6.8 percent.

Suggested Citation

  • Michael Dinerstein & Rigissa Megalokonomou & Constantine Yannelis, 2022. "Human Capital Depreciation and Returns to Experience," American Economic Review, American Economic Association, vol. 112(11), pages 3725-3762, November.
    • Handle: RePEc:aea:aecrev:v:112:y:2022:i:11:p:3725-62
    DOI: 10.1257/aer.20201571
    as

    Download full text from publisher

    File URL: https://www.aeaweb.org/doi/10.1257/aer.20201571
    Download Restriction: no
    File URL: https://doi.org/10.3886/E165721V1
    Download Restriction: no
    File URL: https://www.aeaweb.org/doi/10.1257/aer.20201571.appx
    Download Restriction: no
    File URL: https://www.aeaweb.org/doi/10.1257/aer.20201571.ds
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.
    File URL: https://libkey.io/10.1257/aer.20201571?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Tsakloglou, Panos & Cholezas, Ioannis, 2005. "Education and Inequality in Greece," IZA Discussion Papers 1582, Institute of Labor Economics (IZA).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Michael Chletsos & Stelios Roupakias, 2020. "Education and wage inequality before and during the fiscal crisis: A quantile regression analysis for Greece 2006–2016," Review of Development Economics, Wiley Blackwell, vol. 24(4), pages 1333-1364, November.
    2. Rebekka Christopoulou & Theodora Kosma, 2009. "Skills and Wage Inequality in Greece: Evidence from Matched Employer-Employee Data, 1995-2002," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 26, Hellenic Observatory, LSE.
    3. Angelopoulos, Angelos & Economides, George & Liontos, George & Philippopoulos, Apostolis & Sakkas, Stelios, 2022. "Public redistributive policies in general equilibrium: An application to Greece," The Journal of Economic Asymmetries, Elsevier, vol. 26(C).
    4. Elias Katsikas & Theodore Panagiotidis, 2011. "Student Status and Academic Performance: Accounting for the Symptom of Long Duration of Studies in Greece," Discussion Paper Series 2011_04, Department of Economics, University of Macedonia, revised Mar 2011.
    5. Glomm, Gerhard & Jung, Juergen & Tran, Chung, 2018. "Fiscal Austerity Measures: Spending Cuts Vs. Tax Increases," Macroeconomic Dynamics, Cambridge University Press, vol. 22(2), pages 501-540, March.
    6. Panagiotis Liargovas & Georgios Fotopoulos, 2009. "Socioeconomic Indicators for Analyzing Convergence: The Case of Greece: 1960–2004," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 93(2), pages 315-330, September.
    7. Elias Katsikas & Theodore Panagiotidis, 2010. "Student Status and Academic Performance: an approach of the quality determinants of university studies in Greece," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 40, Hellenic Observatory, LSE.
    8. Rebekka Christopoulou & Theodora Kosma, 2009. "Skills and Wage Inequality in Greece: Evidence from Matched Employer-Employee Data, 1995-2002," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 26, Hellenic Observatory, LSE.
    9. Denisa Maria Sologon & Cathal O'Donoghue, 2009. "Earnings Dynamics and Inequality in EU, 1994-2001," SOEPpapers on Multidisciplinary Panel Data Research 184, DIW Berlin, The German Socio-Economic Panel (SOEP).
    10. Konstantinos Pouliakas & Ioannis Theodossiou, 2005. "Socio-Economic Differences in the Perceived Quality of High and Low-Paid Jobs in Europe," Labor and Demography 0506002, University Library of Munich, Germany.
    11. Pouliakas, Konstantinos & Theodossiou, Ioannis, 2005. "Socio-Economic Differences in the Satisfaction of High-Pay and Low-Pay Jobs in Europe," MPRA Paper 16733, University Library of Munich, Germany, revised 10 Aug 2009.
    12. Michael Dinerstein & Rigissa Megalokonomou & Constantine Yannelis, 2020. "Human Capital Depreciation," CESifo Working Paper Series 8614, CESifo.
    13. Stavros Rodokanakis & Vasileios A. Vlachos, 2012. "Measuring the Unemployment Risk in Northern Greece from the LFS Micro-Data during the Period 1994-2006," Review of Economic Analysis, Digital Initiatives at the University of Waterloo Library, vol. 4(2), pages 224-246, December.
    14. Daouli, Joan & Demoussis, Michael & Giannakopoulos, Nicholas, 2010. "Mothers, fathers and daughters: Intergenerational transmission of education in Greece," Economics of Education Review, Elsevier, vol. 29(1), pages 83-93, February.

    More about this item

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aecrev:v:112:y:2022:i:11:p:3725-62. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.