Working Paper: NBER ID: w27925
Authors: Michael Dinerstein; Rigissa Megalokonomou; Constantine Yannelis
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 0.05 standard deviations. Using a simple production model, we estimate a skill depreciation rate of 4.3% and experience returns of 6.8%.
Keywords: Human Capital; Depreciation; Teacher Productivity; Unemployment
JEL Codes: H52; I26; J24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| time without formal employment (J46) | student test scores (I21) |
| time without formal employment (J46) | teacher productivity (J24) |
| years without formal employment (J68) | skill depreciation (J24) |
| teacher productivity (J24) | student test scores (I21) |
| inexperienced teachers (A21) | skill depreciation (J24) |
| inexperienced teachers (A21) | experience returns (I26) |