How do Workers Learn? Theory and Evidence on the Roots of Lifecycle Human Capital Accumulation

Xiao Ma, Alejandro Nakab and Daniela Vidart
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Alejandro Nakab: Universidad Torcuato Di Tella

No 2022-11, Working papers from University of Connecticut, Department of Economics

Abstract: How do the sources of worker learning change over the lifecycle, and how do these changes affect human capital accumulation and wage growth? We use worker qualifica-tion data from Germany and the US to document that internal learning (learning from colleagues) decreases with workers’ experience, whereas external learning (on-the-job training) has an inverted U-shape in workers’ experience. To shed light on these find-ings, we build a quantitative search model featuring a two-source learning technology where firms and workers jointly choose learning investments, and the incentives to learn from each of the two sources evolve throughout the lifecycle as the worker’s position in the human capital distribution of the firm changes. The calibrated model replicates our empirical findings and suggests that more productive firms provide better learning environments by offering a wider variety of learning options. Quantitative results in-dicate that internal learning plays a key role in driving the lifecycle increase in wage growth and dispersion due to compensation for the learning spillovers high-skill workers trigger for their colleagues; and that the disruption to internal learning triggered by remote work not only impacts the human capital acquisition of young workers, but also depresses the wages of more senior workers since part of their compensation is tied to their ability to teach younger coworkers.

Keywords: On-the-job Learning; Human Capital Accumulation; Lifecycle wage growth (search for similar items in EconPapers)
JEL-codes: E24 J24 M53 (search for similar items in EconPapers)
Pages: 99 pages
Date: 2022-04, Revised 2023-08
New Economics Papers: this item is included in nep-ban, nep-bec, nep-dge, nep-hrm and nep-mac
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