Make IT Work: The Labor Market Effects of Information Technology Retraining in the Netherlands

Melvin Vooren (), Carla Haelermans, Wim Groot and Henriette Maassen van den Brink
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Melvin Vooren: Vrije Universiteit Amsterdam
Carla Haelermans: Maastricht University
Wim Groot: Maastricht University
Henriette Maassen van den Brink: University of Amsterdam

De Economist, 2022, vol. 170, issue 3, No 2, 323-342

Abstract: Abstract The aim of this paper is to evaluate the effects of an active labor market program (ALMP) for higher educated workers in the Netherlands. The one-year program is characterized by six months of full-time IT retraining followed by a six-month internship. We estimate the effects of participating on earnings per month and working days per month. The results show significant lock-in effects during the program, lasting up to five months after program start. After this lock-in period, we find significant positive effects on earnings and working days. These positive effects remain significant until the end of the 36-month evaluation period. A conservative cost–benefit analysis based on the effects on earnings shows a return of 2.53% (95% CI 2.02–3.04%), which is low compared to the returns to education in the Netherlands of around 8%. We conclude that IT retraining has positive effects on the labor market outcomes of the participants yet relatively low returns.

Keywords: Active labor market policy; Retraining; Information technology; Labor market out- comes; Internal rate of return (search for similar items in EconPapers)
JEL-codes: I26 J68 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s10645-022-09408-6

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