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Mind the gap? Estimating the effects of postponing higher education

Author

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  • Bertil Holmlund
  • Qian Liu
  • Oskar Nordström Skans

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 lifetime earnings by nearly one half of one year's peak earnings. Copyright 2008 , Oxford University Press.

Suggested Citation

  • Bertil Holmlund & Qian Liu & Oskar Nordström Skans, 2008. "Mind the gap? Estimating the effects of postponing higher education," Oxford Economic Papers, Oxford University Press, vol. 60(4), pages 683-710, October.
    • Handle: RePEc:oup:oxecpp:v:60:y:2008:i:4:p:683-710
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    File URL: http://hdl.handle.net/10.1093/oep/gpn010
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    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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