From asessment to employment: The impact of skills tests on reemployment outcomes in Germany

Abstract

This study examines the long-term effects of a standardized skills assessment test-MySkills-on the employment outcomes of jobseekers without formal vocational qualifications in Germany. In a labour market where certified qualifications are the key currency for access to stable jobs, individuals lacking such credentials face persistent structural disadvantages. This includes a large share of refugees, migrants, and native low-skilled workers who may possess substantial work experience but lack documented proof of their competencies. Public Employment Service (PES) caseworkers and employers often struggle to evaluate these jobseekers' true abilities, leading to mismatches in job referrals and limited access to Active Labour Market Programmes (ALMPs). To address these challenges, the German Federal Employment Agency introduced MySkills-a standardised, computer-based assessment tool designed to make informally acquired skills visible. After a test phase, MySkills was fully active 2019-2022, when low participation rates and high costs led to dropping the test. Unlike formal qualifications, MySkills does not confer certification but provides structured feedback across 30 occupational fields. The expectation was that this tool can improve the alignment between jobseekers and available training or employment measures, particularly for those outside the traditional education and training systems. Using rich administrative data from the German social security system spanning 2019 to 2022, we compare individuals who took the MySkills test to those who were referred but ultimately did not participate. To address selection bias, we apply inverse probability weighting based on a propensity score model, complemented by robustness checks and sensitivity analyses. Our results show that test participation does not lead to immediate improvements in employment - which confirms expectations from qualitative findings published earlier (Promberger and Kawalec 2024). In fact, a short-term decline in employment compared to the control group is observed, likely due to an increased enrolment in ALMPs. However, this pattern reverses over time. By the fourth year following the test referral, participants are up to six percentage points more likely to be in regular contributory employment than non-participants- equivalent to about 20 additional days of employment per year. The strongest positive effects are observed in vocational training and short-term skill-building programmes. The evidence suggests that the MySkills test enhances not the direct job transitions but the effectiveness of caseworker recommendations by offering objective signals of ability, thus improving programme targeting. However, the tool's limited uptake, long duration, and weak signalling value for employers curtailed its full potential. Qualitative insights indicate that, where applied, its greatest utility lay in aiding caseworkers rather than directly empowering jobseekers. In sum, MySkills functioned less as a standalone intervention and more as an institutional support mechanism within the Public Employment Services. When integrated properly, such tools can help reduce bias, improve matching quality, and promote long-term labour market integration for disadvantaged groups. To enhance impact, future initiatives should prioritise ease of use, broader recognition, and active integration into counselling routines.