Mincer, Jacob, and Haim Ofek. 1982. "Interrupted Work Careers: Depreciation and Restoration of Human Capital." Journal of Human Resources 17(1): 3-24.

The quantitative effects and even the existence of a "human capital depreciation" phenomenon have been a subject of controversy in the recent literature. Prior work, however, was largely cross-sectional and the longitudinal dimension, if any, was retrospective. Using longitudinal panel data (on married women in NLS) we have now established that real wages at reentry are, indeed, lower than at the point of labor force withdrawal, and the decline in wages is greater, the longer the interruption. Another striking finding is a relatively rapid growth in wages after the return to work. This rapid growth appears to reflect the restoration (or "repair") of previously eroded human capital. The phenomenon of "depreciation" and "restoration" is also visible in data for immigrants to the United States. However, while immigrants eventually catch up with and often surpass natives, returnees from the non-market do not fully restore their earnings potential.

Mincer is Professor of Economics, Columbia University. Ofek is on the Economics faculty at the State University of New York, Binghamton.
* We are grateful to the National Science Foundation and to the Sloan Foundation for support of this research. Helpful comments were received from referees and the editor.

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