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

Author

Listed:
  • Melvin Vooren

    (Vrije Universiteit Amsterdam
    University of Amsterdam)

  • Carla Haelermans

    (Maastricht University)

  • Wim Groot

    (Maastricht University)

  • Henriette Maassen van den Brink

    (University of Amsterdam)

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.

Suggested Citation

  • Melvin Vooren & Carla Haelermans & Wim Groot & Henriette Maassen van den Brink, 2022. "Make IT Work: The Labor Market Effects of Information Technology Retraining in the Netherlands," De Economist, Springer, vol. 170(3), pages 323-342, August.
    • Handle: RePEc:kap:decono:v:170:y:2022:i:3:d:10.1007_s10645-022-09408-6
    DOI: 10.1007/s10645-022-09408-6
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    References listed on IDEAS

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    More about this item

    Keywords

    Active labor market policy; Retraining; Information technology; Labor market out- comes; Internal rate of return;
    All these keywords.

    JEL classification:

    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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