Human Capital Depreciation and Education Level

We investigate the link between human capital depreciation and education level through a nonlinear wage equation, using data from the Swiss Labor Force Survey (SLFS) over the period 1998-2008. Instead of using a purely quantitative approach to separate workers by years of education, qualitative aspects of educational system are taken into account. Taking advantage of the Swiss educational system characteristics, workers are separated on the basis of their education type. Workers with vocational education (apprenticeships, professional and technical schools, and universities of applied sciences) are assumed to possess a relatively specific human capital, compared to those with academic education (high schools and universities). Human capital depreciation is found to be significantly related to education type. Academic ("concept-based") education protects workers more effectively against depreciation than vocational ("skill-specific") education.