Reskilling Decisions of Unemployed Jobseekers

Abstract

Rapid shifts in labor demand across occupations are intensifying the need for workforce reskilling. Yet, despite potentially large returns, training take-up remains low in many countries. This paper investigates the role of occupational preferences and working conditions in shaping individuals’ reskilling decisions. Using a discrete choice experiment conducted in partnership with a Public Employment Service in Belgium, we elicit the preferences of unemployed jobseekers over training programs that vary in the target occupation, training program attributes, and employer-offered working conditions in the destination job. We find that jobseekers hold strong occupational preferences that act as a significant barrier to retraining outside their preferred occupation. However, reducing the opportunity cost of training — through shorter waiting times, reduced commuting distances, and condensed training duration — can meaningfully increase their willingness to train outside their preferred occupation. We further show that employer-level working conditions, including career evolution prospects, schedule flexibility, work hardship, and salary, also influence this decision. These findings suggest that while policymakers and employers have actionable levers to redirect workers toward shortage occupations, individual occupational preferences constitute a structural constraint that interventions must account for. Joint paper with Benjamine Dejardin, Alexia Delfino, Raffaella Sadun and Ilan Tojerow.