Education Policy and the Consequences for Labor Market Integration in Denmark, Germany, and the Netherlands

In my dissertation, I analyze the role of education policy in structuring labor market opportunities for workers and shaping the policy space for architects of active labor market policies. After underscoring the increased salience of education policy in addressing the heightened risk of skill obsolescence, I develop the concept of an education system in order to derive testable hypotheses about the relationship between education policy, workers’ skills, and labor market outcomes.

In my conceptualization, education policy varies along two dimensions. The skill acquisition dimension speaks to the ways in which education policies invest in individuals’ cognitive capacities and expand opportunities to learn. The skill transparency dimension captures the market-orientation of skills learned in formal education, the transparency of skill certification methods, and the recognition of complementarities between different qualifications. In the first two substantive chapters, I build indices for these two dimensions and investigate their determinants using regression and fuzzy set analysis.

I then narrow the focus to the three cases of Denmark, Germany, and the Netherlands, which were selected according to Mill’s method of difference. With well-established social democratic parties and highly coordinated worker and employer organizations, the literature theorizes, and the empirical evidence confirms, that these countries reveal high levels of social spending. The rankings of these three countries on the skill acquisition and skill transparency dimensions, however, differ substantially: Denmark ranks at the top of both dimensions; Germany is a distinct laggard; and the Netherlands lies in between with slightly above average scores on both dimensions.

In order to deepen the understanding of the causal processes accountable for the differentiated paths of education policy development in Denmark, Germany, and the Netherlands, I conduct a comparative historical analysis of policy reforms in these three countries. In particular, three thematic groups of policies were considered, including the comprehensive school movement, continuing education policies, and active labor market policies.

The final part of the dissertation explores a central hypothesis of the theoretical framework, which links the structure of the education system to both the skills of marginalized workers and the efficiency of active labor market policies. Replicating Cathie Jo Martin’s fifty-five firm interviews in Denmark with a hundred German and Dutch firms, I used quantitative and qualitative interview data to scrutinize firms’ hiring and training processes with particular attention to their incentives structures to participate in active labor market policies. Danish firms tend to use active labor market policies as a key component of their hiring and training policy. In contrast, German firms use these policies only marginally and frequently as a means to access cheap labor. The participation of regular private firms in active labor market policies in the Netherlands is relatively low, although private employment firms engage highly in the reintegration of marginalized workers. Looking to the relationship between the state and private firms provides some leverage in explaining these findings.

Chapter Overview

Chapter One: Introduction

Chapter Two: Economic Change and Skill Obsolescence: Restructuring Education Policy to Facilitate Labor Market Integration

Chapter Three: Tracing the Causal Path towards Skill Acquisition and Skill Transparency

Chapter Four: Case Selection

Chapter Five: The Comprehensive Schooling Movement

Chapter Six: Continuing Education Policies

Chapter Seven: Active Labor Market Policies

Chapter Eight: Education Systems and the Role of Private Firms in the Reintegration of Marginalized Workers

Chapter Nine: Conclusion