The timing of employment interruptions and future wages

This thesis formulates and estimates an empirical model of the effect of human capital depreciation on future wages. It permits the identification of human capital depreciation by comparing the different effects that work interruptions have on workers wages based on the timing of these interruptions during their careers. Recent career interruptions have a negative effect on workers productivity; as time passes, the negative effects of these interruptions become negligible. The empirical analysis uses the National Longitudinal Survey of Youth 1979. The results show that the rate of human capital depreciation varies according to different types of workers. Depreciation may be lower among women. This may be a result of self-selection among workers who can more easily plan future career interruptions.