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Dislocated Worker Human Capital Depreciation And Recovery, Kevin M. Hollenbeck

Upjohn Institute Working Papers

Previous studies have estimated the "human capital depreciation" of women re-entering the work force after voluntary, lengthy interruptions. Those studies have found reduced real wages and furthermore the decrease is positively related to the length of the interruption. Upon re-entry, however, real wages grow rapidly as human capital is restored. This paper develops a model of the wage histories of dislocated workers. Similar to labor force re-entrants, those dislocated workers who become re-employed would experience wages below their final wage prior to dislocation and the decrease should be associated with the length of dislocation. However, the model suggests that since …