The purpose of this paper is to investigate which sectors are more vulnerable to human capital depreciation, with an emphasis on potential differences in skills and in ICT intensities.
We estimate an extended Mincerian earnings equation based on Neuman & Weiss’s (1995) model using the EU-KLEMS international database for 15 sectors for the period 1980 to 2005. We also test structural ruptures in earnings and human capital depreciation in the labor market per decade controlling by technological intensity. Human capital depreciation ranges from 1 to 6 per cent. It is mainly significant in skill-intensive sectors regardless of the sector’s technological intensity. The analysis of structural breaks shows that human capital value indeed changed from decade to decade. It even appreciated in low skill-intensive sectors in the ‘80s and in the high skill-intensive during the ‘90s. Appreciation though, was mainly skill-biased. To prevent human capital from depreciating the educational systems should provide the tools for ongoing lifelong learning at all skill levels because the threat comes from skills inflexibility rather than from the sector’s technology intensity. Instead of using cross-section analysis which is considered to be a pitfall in studying the depreciation of knowledge, we observe its dynamic on a longitudinal basis. Our international macro-sectoral approach goes beyond limited micro-sectoral analysis in certain countries.