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Human capital depreciation and education level

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  • Sylvain Weber

Abstract

Purpose - – The purpose of this paper is to investigate the link between human capital depreciation and education level, with an emphasis on potential differences between general and specific education. Design/methodology/approach - – A nonlinear wage equation, based on Arrazola and de Hevia's (2004) model, is estimated using data from the Swiss Labor Force Survey (SLFS) over the period 1998-2008, in order to estimate a human capital depreciation rate for several education groups. Findings - – Human capital depreciation is significantly related to education type. Academic (“concept-based”) education protects workers more effectively against depreciation than vocational (“skill-specific”) education. Research limitations/implications - – The SLFS survey is a rotating panel of five years and no retrospective data on earnings and employment are provided. A study of lifecycle earnings like the one proposed here would clearly benefit from a longer individual observation period. Practical implications - – In all educational tracks, even vocational ones, a substantial time share should be devoted to the acquisition of general skills. Moreover, it is necessary to manage lifelong learning carefully in order not to waste initial investments in education. Originality/value - – Instead of using a purely quantitative approach to separate workers by years of education, qualitative aspects of educational system are taken into account. Taking advantage of the Swiss educational system characteristics, workers are separated on the basis of their education type. Workers with vocational education (apprenticeships, professional and technical schools and universities of applied sciences) are assumed to possess a relatively specific human capital, compared to those with academic education (high schools and universities).

Suggested Citation

  • Sylvain Weber, 2014. "Human capital depreciation and education level," International Journal of Manpower, Emerald Group Publishing Limited, vol. 35(5), pages 613-642, July.
    • Handle: RePEc:eme:ijmpps:v:35:y:2014:i:5:p:613-642
    DOI: 10.1108/IJM-05-2014-0122
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    Citations

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    Cited by:

    1. Eric A. Hanushek & Guido Schwerdt & Ludger Woessmann & Lei Zhang, 2017. "General Education, Vocational Education, and Labor-Market Outcomes over the Lifecycle," Journal of Human Resources, University of Wisconsin Press, vol. 52(1), pages 48-87.
    2. Naval, Joaquín & Silva, José I. & Vázquez-Grenno, Javier, 2020. "Employment effects of on-the-job human capital acquisition," Labour Economics, Elsevier, vol. 67(C).
    3. Franziska Hampf & Ludger Woessmann, 2017. "Vocational vs. General Education and Employment over the Life Cycle: New Evidence from PIAAC," CESifo Economic Studies, CESifo Group, vol. 63(3), pages 255-269.
    4. Marco PECORARO, 2011. "Estimating the returns to educational mismatch with panel data: the role of unobserved heterogeneity," LIDAM Discussion Papers IRES 2011036, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    5. Marconi, Gabriele, 2015. "Dynamic returns to schooling by work experience," MPRA Paper 88073, University Library of Munich, Germany.
    6. Ollikainen, Jani-Petteri, 2021. "Comprehensive school reform and labor market outcomes over the lifecycle: Evidence from Finland," Labour Economics, Elsevier, vol. 68(C).
    7. Sa'Adi Awang & Siti Arni Basir, 2016. "Challenges of Human Capital Development in Islamic Administration Institutes in Malaysia (IAM)," Proceedings of International Academic Conferences 3605499, International Institute of Social and Economic Sciences.
    8. Neyt, Brecht & Verhaest, Dieter & Baert, Stijn, 2020. "The impact of dual apprenticeship programmes on early labour market outcomes: A dynamic approach," Economics of Education Review, Elsevier, vol. 78(C).
    9. Guido Vignoli, 2012. "Tasa de depreciación de capital humano: Evidencia empírica para Argentina," CEMA Working Papers: Serie Documentos de Trabajo. 498, Universidad del CEMA.
    10. Golo Henseke, 2019. "Against the Grain? Assessing Graduate Labour Market Trends in Germany Through a Task-Based Indicator of Graduate Jobs," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 141(2), pages 809-840, January.
    11. Inés P. Murillo, 2011. "Human capital obsolescence: some evidence for Spain," International Journal of Manpower, Emerald Group Publishing Limited, vol. 32(4), pages 426-445, July.
    12. Jens K. Perret, 2014. "Religion, Growth and Innovation in Contemporary Russia," Schumpeter Discussion Papers SDP14006, Universitätsbibliothek Wuppertal, University Library.
    13. Brecht Neyt & Dieter Verhaest & Stijn Baert, 2019. "The Impact of Internship Experience During Secondary Education on Schooling and Labour Market Outcomes," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 19/980, Ghent University, Faculty of Economics and Business Administration.
    14. Bonev, Petyo, 2020. "Nonparametric identification in nonseparable duration models with unobserved heterogeneity," Economics Working Paper Series 2005, University of St. Gallen, School of Economics and Political Science.
    15. Emma Lappi & Johan E. Eklund & Johan Klaesson, 2022. "Does education matter for the earnings of former entrepreneurs? Longitudinal evidence using entry and exit dynamics," Journal of Evolutionary Economics, Springer, vol. 32(3), pages 827-865, July.
    16. Manuel Guerra & João Pereira & Miguel St. Aubyn, 2018. "Life cycles with Endogenous Time Allocation and Age-Dependent Mortality," Working Papers REM 2018/56, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    17. Janusz Jabłonowski, 2018. "Implications of Transitory and Permanent Changes in Tax Rates for Poland," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 2, pages 73-97.

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