Skills and Youth Labor Market Integration – Self-rated specific skills are more positively related to favorable labor market outcomes than self-rated generic skills

The transition from school to work is regarded as a precarious period for young people, as they often have to deal with periods of job searching, occupational mismatches and flexible contracts (Levels et al. 2014; Scherer 2005; Wolbers 2003). Education plays a decisive role in preparing youth for the labor market, and the provision of skills and qualifications is therefore one of the key tasks of the education system (Van de Werfhorst 2014). This ‘labor market task’ is most strongly featured in vocational education, by providing students with skills that make them productive for work, which ultimately optimizes their labor market perspectives (Van de Werfhorst and Mijs 2010). As time within a curriculum is limited and a trade-off likely occurs in time spent on acquiring one skill at the expense of the other (e.g. Meng 2006), it is important to consider which types of skills play a more positive role in graduated school-leavers’ labor market integration.

Additionally, in the absence of a readily assessable level of skills, educational signals (Spence 1973) can be complementary means for employers to assess information about graduates’ level of productivity, which, if positive, optimizes graduates’ labor market perspectives (Bills 2003; Iannelli and Raffe 2007). Thus, vocational education provides students with different types of skills and signals, both of which are important resources for young people to enter the labor market (Hannan et al. 1997).

In this paper, we contribute to this discussion by investigating both the role of different types of self-evaluated skills and signals in graduates’ labor market integration process, one and a half year after finishing vocational education in the Netherlands. As the graduates under investigation reflect on their integration process after 18 months from graduation, we largely but not solely capture the self-rated skills acquired in education, as these self-perceived skills may have further accumulated on the job and over time. Hence, we examine the impact of signals on labor market integration, but in the case of self-rated skills, we only examine their relationship with certain labor market outcomes. Our first research question reads as follows: To what extent are self-rated specific and generic skills and different types of educational signals positively related to the labor market integration process of graduated school-leavers from vocational education in the Netherlands?

This paper investigates to what extent self-rated job-specific and generic skills and different types of educational signals are positively related to the labor market integration process of Dutch graduates, 18 months after finishing upper secondary vocational education. Our contributions to the current literature are that of simultaneously investigating these different types of skills and (a more extensive concept of) educational signals, and moreover examining to what extent the impact of self-rated specific skills and educational signals differ between the four labor market outcomes under investigation. We analyzed secondary survey data from the VET survey collected in the Netherlands in 2015. Results indicate that
(1) self-rated specific skills—acquired either in education or on the job—are more positively related to favorable labor market outcomes than self-rated generic skills in the first 18 months of graduates’ integration process,
(2) only certain educational signals positively impact labor market integration, and
(3) the positive impact of self-rated specific skills and signals varies between different labor market outcomes.

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