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The Timing of Employment Breaks: How Does It Affect Pension Benefits? ; Empirical Evidence from Germany


  • Niklas Potrafke


This paper provides empirical evidence how the timing of employment breaks affects pension benefits in Germany. Analysing the biographical data set from the German Pension Insurance (SUF VVL 2004) the employment histories of individuals aged 21 to 60 can be mirrored in detail. We relate differences in pension benefits to employment breaks due to unemployment and parental leave in the individual life cycle, distinguishing by gender. Three different career phases (early, middle and late) are distinguished and respective social policy phases are considered. As predicted by human capital theory, the losses due to career interruptions in the early and middle employment period differ. However, the negative effects due to unemployment in the late employment period are only weak. This finding detects special characteristics of the covered age-groups in the data set.

Suggested Citation

  • Niklas Potrafke, 2007. "The Timing of Employment Breaks: How Does It Affect Pension Benefits? ; Empirical Evidence from Germany," Discussion Papers of DIW Berlin 710, DIW Berlin, German Institute for Economic Research.
  • Handle: RePEc:diw:diwwpp:dp710

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    References listed on IDEAS

    1. Beblo, Miriam & Wolf, Elke, 2002. "Wage Penalties for Career Interruptions: An Empirical Analysis for West Germany," ZEW Discussion Papers 02-45, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    2. 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 76-108, Part II, .
    3. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters,in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
    4. Kunze, Astrid, 2002. "The Timing of Careers and Human Capital Depreciation," IZA Discussion Papers 509, Institute for the Study of Labor (IZA).
    5. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, January.
    6. 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 121-154, January.
    7. Jacob Mincer & Haim Ofek, 1982. "Interrupted Work Careers: Depreciation and Restoration of Human Capital," Journal of Human Resources, University of Wisconsin Press, vol. 17(1), pages 3-24.
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    Cited by:

    1. Hänisch, Carsten & Klos, Jonas, 2016. "Long-run effects of career interruptions: A micro-simulation study," Discussion Paper Series 2016-03, University of Freiburg, Wilfried Guth Endowed Chair for Constitutional Political Economy and Competition Policy.

    More about this item


    employment histories; career interruptions; pension benefits;

    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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