Interested parties are welcome to attend.
Presentation Title: “How do Workers Learn? Theory and Evidence on the Roots of Lifecycle Human Capital Accumulation”
How do the sources of worker learning change over the lifecycle, and how do these changes affect on-the-job human capital accumulation and wage growth? We use detailed worker qualification data from Germany and the US to document that internal learning (learning through colleagues) decreases with worker experience, while external learning (on-the-job training) has an inverted U-shape in worker experience. To shed light on these findings, we build an analytical model where the incentives to learn from each of these two sources evolve throughout the lifecycle due to shifts in the relative position of the worker in the human capital distribution. We embed this two-source learning mechanism in a quantitative Burdett and Mortensen search framework where firms and workers jointly fund learning investments. The model equilibrium replicates our empirical lifecycle results, and shows that more productive firms provide better learning environments by offering greater variety in learning options. Counterfactual analyses imply that the two sources are highly complementary, that internal learning is more critical for young workers’ wage growth although external learning is more critical for overall lifetime wage growth, and that the lifecycle increase in wage dispersion is driven by external learning.
Contact Joe Kaboski for information.