Mind the Gap? Estimating the Effects of Postponing Higher Education

Posted: 2 Oct 2008

See all articles by Bertil Holmlund

Bertil Holmlund

Uppsala University - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Qian Liu

Uppsala University

Oskar Nordström Skans

Uppsala University

Multiple version iconThere are 2 versions of this paper

Date Written: October 2008

Abstract

This paper estimates the effects on earnings of ‘gap years’ between high school and university enrollment. The effect is estimated by means of standard earnings functions augmented to account for gap years and a rich set of control variables using administrative Swedish data. We find that postponement of higher education is associated with a persistent and non-trivial earnings penalty. The main source of the persistent penalty appears to be the loss of work experience after studies. Two years postponement reduces the present value of lifetime earnings by nearly one half of one year's peak earnings.

JEL Classification: I23, J24, J31

Suggested Citation

Holmlund, Bertil and Liu, Qian and Nordström Skans, Oskar, Mind the Gap? Estimating the Effects of Postponing Higher Education (October 2008). Oxford Economic Papers, Vol. 60, Issue 4, pp. 683-710, 2008. Available at SSRN: https://ssrn.com/abstract=1277044 or http://dx.doi.org/gpn010

Bertil Holmlund (Contact Author)

Uppsala University - Department of Economics ( email )

SE-75120 Uppsala
Sweden
+46 18 471 1122 (Phone)
+46 18 471 1478 (Fax)

HOME PAGE: http://www.nek.uu.se/faculty/holmlund/index.html

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Qian Liu

Uppsala University ( email )

Box 513
Uppsala, 751 20
Sweden

Oskar Nordström Skans

Uppsala University

Box 513
Uppsala, 751 20
Sweden

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