Human Capital Depreciation

104 Pages Posted: 14 Oct 2020 Last revised: 21 Apr 2022

See all articles by Michael Dinerstein

Michael Dinerstein

University of Chicago

Rigissa Megalokonomou

University of Queensland - School of Economics

Constantine Yannelis

University of Chicago

Multiple version iconThere are 3 versions of this paper

Date Written: October 2020

Abstract

Human capital can depreciate if skills are unused. But estimating human capital depreciation is challenging, as worker skills are difficult to measure and less productive workers are more likely to spend time in non-employment. We overcome these challenges with new administrative data on teachers’ assignments and their students’ outcomes, and quasi- random variation from the teacher assignment process in Greece. We find significant losses to output, as a one-year increase in time without formal employment lowers students’ test scores by 0.09 standard deviations. Using a simple production model, we estimate a skill depreciation rate of 4.3% and experience returns of 6.8%.

Suggested Citation

Dinerstein, Michael and Megalokonomou, Rigissa and Yannelis, Constantine, Human Capital Depreciation (October 2020). NBER Working Paper No. w27925, Available at SSRN: https://ssrn.com/abstract=3709615

Michael Dinerstein (Contact Author)

University of Chicago ( email )

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Chicago, IL 60637
United States

HOME PAGE: http://https://sites.google.com/site/michaeldinerstein/

Rigissa Megalokonomou

University of Queensland - School of Economics ( email )

Brisbane, QLD 4072
Australia

Constantine Yannelis

University of Chicago ( email )

1101 East 58th Street
Chicago, IL 60637
United States

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