Time off at What Price? The Effects of Career Interruptions on Earnings

Abstract

Using the National Longitudinal Survey of Youth 1979, the author explores how nonemployment spells and career expectations affected men's and women's wages. Wage profiles were affected by total nonemployment time, by recent work interruptions, and by some past interruptions. Statistically significant interruptions were more numerous for women than men, but the wage loss associated with any given interruption was less severe for women. Future career interruptions, which workers presumably anticipate in many cases, affected current investment in human capital to some degree for both sexes. The wage effects of the timing of experience (defined by the fraction of weeks worked, by specific years) correspond closely to the wage effects of interruptions (calendar years without work): when the analysis accounts for the former, little additional penalty is found to have been associated with the latter. A very small fraction of the gender wage gap was attributable solely to timing of experience.

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