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Mind the gap? Estimating the effects of postponing higher education

Författare: Bertil Holmlund, Och Qian Liu, Och Oskar Nordström Skans, Och

Publicerad i: Oxford Economic Papers 2008, vol. 60, no. 4, pp. 683-710

Sammanfattning av Working paper 2006:11

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 life time earnings by 40-50 percent of annual earnings at age 40.
Keywords: timing of education, schooling interruptions, work experience
JEL-codes: I23, J24, J31.

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 life time earnings by 40-50 percent of annual earnings at age 40.

Keywords: timing of education, schooling interruptions, work experience
JEL-codes: I23, J24, J31.

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