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Oxford Economic Papers Advance Access published online on November 25, 2008
Oxford Economic Papers, doi:10.1093/oep/gpn044
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© Oxford University Press 2008 All rights reserved

Human capital depreciation during hometime

Dennis Görlich* and Andries de Grip{dagger}

*The Kiel Institute for the World Economy, 24100 Kiel, Germany.
{dagger}Research Centre for Education and the Labor Market (ROA), Faculty of Economics and Business Administration, Maastricht University, Netherlands, and IZA, Bonn; e-mail: a.degrip{at}roa.unimaas.nl

JEL classifications: J24, J16, J13


  Abstract

We estimate human capital depreciation rates during career interruptions due to family reasons (parental leave and household time) in male- and female-dominated occupations. If human capital depreciation due to family related career breaks is lower in female than in male occupations, this can explain occupational sex segregation because women will take the costs of future breaks into account when optimizing their lifetime earnings. We find that short-run depreciation rates in high-skilled occupations are significantly lower in female than in male occupations. In low-skilled occupations, there is no evidence of this difference. Our findings support the self-selection hypothesis with respect to occupational sex segregation in the more skilled jobs, i.e. high-skilled women might deliberately choose female occupations because of the lower short-term wage penalties for family-related career interruptions.


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