IZA’s research team “Skill Formation” examines the competencies that the workers of the future need to be successful in changing labor markets. Technological progress and globalization change the skills valued on the job in difficult to predict ways. Incumbent generations of workers have to update their skills when occupational knowledge becomes obsolete. Future generations of workers decide about skill investments under uncertainty about future skill returns. The role of public policy is to provide necessary formal education environments, but this can affect skill formation only with substantial time lags.
Against this overarching theme, our research pursues three lines of work:
- Our analyses help identifying the skills needed to adapt to changing environments.
- We contribute to a better understanding of the environments and determinants of skill formation to find potential levers for public policy interventions.
- We provide empirical evidence on policy measures and interventions which aim at improving skill formation.