Title of paper "Human Capital Depreciation: Evidence from Teachers Waitlists" with Dinerstein (Chicago) and Yannelis (Chicago Booth)

 Abstract: Human, like physical capital, can depreciate over time if skills are unused. Measuring human capital depreciation is difficult, both because productivity is inherently difficult to measure, and because less productive workers are more likely to spend time out of the labor force. We overcome both concerns by using new data on teachers and their assignments. In Greece, all education graduates are guaranteed public sector positions; however positions are typically not immediately available for new graduates. Teachers are quasi-randomly assigned to waitlists by degree date, generating variation in time spent out of the labor forces. We find significant human capital depreciation, as a one year increase in the average time spent out of the labor force leads to a 0.11 standard deviation decline in students’ average test scores in standardised high-stake exams. Effects are stronger for the first few years out of the labor force and for experienced teachers.