Essays on human capital formation and active labor market policies

Human capital theory is based on the idea that workers possess a combination of skills that can be made productive in the labor market. According to human capital theory, differences in the levels of human capital in the workforce explain differences in wages and employment rates. Involuntary unemployment occurs when the supply of human capital in the workforce is not tailored to the corresponding demand by employers. This problem arises when the demand for human capital has changed, for instance, due to technological advancements. This mechanism is especially relevant in the field of information technology (IT), where new technologies are introduced rapidly, shifting the demand for skills in the IT sector.
As a general policy instrument to combat involuntary unemployment, governments around the world invest in different kinds of labor market programs that are categorized under the umbrella term of active labor market policy (ALMP). The goal of these programs is to improve the labor market outcomes of the participants, including employment rates and earnings. The motivation behind ALMP is to achieve this goal through human capital formation. After participating in the ALMP, the human capital of the participants should be more tailored to demand than before participating. Human capital theory predicts that when ALMP improves the human capital of the participants, this in turn leads to improved labor market outcomes, such as employment rates and earnings.
In undertaking an analysis of human capital theory and labor market policy, this PhD thesis has four objectives. The first is to determine what makes ALMP effective. The second objective is to identify the skills and abilities that employers seek when recruiting new IT personnel for retraining. The third objective involves estimating the determinants of enrollment, study success and dropout in the fields of science, technology, engineering, and mathematics (STEM) in higher education. The final aim is to evaluate the effectiveness of a specific IT retraining program in the Netherlands, which is an ALMP set up in co-operation between the public and private sectors and is specifically aimed at highly educated workers.