Data show that educated workers earn higher wages and are unemployed less often. Some researchers believe that education improves a worker's productivity (or "human capital"), making them more desirable on the job market, while others believe that it improves a worker's network (or "social capital"), giving them more information about lucrative openings and more resources to secure a job (such as references from peers). Much of the research on human and social capital focuses on quantifying the various impacts of schooling on workers and often overlooks how economic systems actually manage to produce those outcomes. This paper develops an agent-based complex adaptive system featuring formal schooling and on-the-job training, social networks, labour market search and durable employment contracts to explain the process linking education to labour market outcomes and economic performance in New Zealand (and similar economies). Sample simulations show that human capital accumulation explains many of the novel facts seen in the data, while social capital alone is not enough.