Time out of work and skill depreciation
This paper investigates the role of skill depreciation in the relationship between work interruptions and subsequent wages. Using unique longitudinal microdata containing information on the ability to understand and practically employ printed information, we are able to analyze changes in skills for individuals as a function of time out of work. In general, we find statistically strong evidence of a negative relationship between work interruptions and skills. Our analysis suggests that depreciation of general information-processing skills is economically significant, with a full year of non-employment being equivalent to moving 5 percentiles down the skill distribution.
Introduction: Active labour market consist of variety of programmes and schemes intended to support unemployed individuals in getting back to work. Besides traditional passive maintaining by means of unemployment benefits many resources are put into these active measures that consist of placement services, counselling, training and employment subsidies.
Author: Per-Anders Edin,Magnus Gustavsson
Source: IFAU – Institute for Labour Market Policy Evaluation
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