Mind the Gap? Estimating the Effects of Postponing Higher Education

39 Pages Posted: 26 Sep 2006

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 Nordstrom Skans

Uppsala University; IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Date Written: August 2006

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. The reduction of lifetime earnings associated with two years postponement of higher education amounts to 40-50 percent of annual earnings at age 40.

Keywords: timing of education, schooling interruptions, returns to work experience

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 (August 2006). CESifo Working Paper Series No. 1792, Available at SSRN: https://ssrn.com/abstract=932496 or http://dx.doi.org/10.2139/ssrn.932496

Bertil Holmlund (Contact Author)

Uppsala University - Department of Economics ( email )

SE-75120 Uppsala
Sweden
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CESifo (Center for Economic Studies and Ifo Institute)

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IZA Institute of Labor Economics

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Qian Liu

Uppsala University ( email )

Box 513
Uppsala, 751 20
Sweden

Oskar Nordström Skans

Uppsala University ( email )

Box 513
Uppsala, 751 20
Sweden

IZA Institute of Labor Economics

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

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