The effect of unemployment, temporary withdrawals and part-time work on workers' wage rates

In this article we discuss the effects of interruptions of labour market participation and part-time work on men's and women's gross wage rates. Workers who interrupt their labour market careers suffer from depreciation of their stock of human capital. Compared to workers who do not interrupt their careers they are even more disadvantaged because every year they do not participate, they miss experience. However, if during this period for which no paid labour is reported a worker engages in investments in human capital the depreciation effect and the effect of missed experience may be partly or fully offset. Using detailed career data for a group of workers from the Netherlands we estimate the effects of interruptions and part-time work for both men and women, which show some remarkable differentials.