2002), The wage penalties of heterogeneous employment biographies: an empirical analysis for Germany, paper presented at EALE conference 2002

– preliminary version – This paper examines the wage effects of different types of career interruptions. We consider the timing and duration of non-employment spells by exploiting a data set of German social security accounts (IAB employment sample) supplemented with administrative data on the employees’ entire working lives (IAB supplement sample I). These data allow us to distinguish between employment breaks due to registered unemployment, parental leave, training or other reasons. We can show that past employment breaks reduce the wage rate of both men and women. Due to the lower returns to “outdated ” human capital the wage loss caused by a career interruption several years ago proves less harmful than that of a more recent break. Our IV fixed effects estimation results suggest that men’s wages are more affected by past unemployment, while women’s wage incomes are negatively related to out-of-the-labor-force periods