Resource title

How much does a year off cost? Estimating the wage effects of employment breaks and part-time periods

Resource image

image for OpenScout resource :: How much does a year off cost? Estimating the wage effects of employment breaks and part-time periods

Resource description

Discontinuities in the employment profile are supposed to cause wage cuts since they imply an interruption in the accumulation of human capital as well as a depreciation of the human capital stock built up in the past. In this paper, we estimate the return to effective experience, taking into account both the timing and the duration of non-work and part-time employment spells. Estimation results for German women suggest that deviations from full-time employment are associated with significant wage cuts owing to the depreciation of human capital. Postponing the discontinuity leads to a further fall of the wage rate. Controlling for individual heterogeneity with respect to industry sector and job position decreases the estimated depreciation rates. This we interpret as an indication for segregation in the labor market. We conclude that traditional wage estimations that do not control for depreciation underestimate the return to effective experience.

Resource author

Miriam Beblo, Elke Wolf

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/24417

Resource license

Adapt according to the presented license agreement and reference the original author.