Department Seminar: “How do Workers Learn? Theory and Evidence on the Roots of Lifecycle Human Capital Accumulation," Daniela Vidart, University of Connecticut

Speaker

Daniela Vidart, University of Connecticut

Biography

Daniela Vidart is an Assistant Professor of Economics at the University of Connecticut. She received her PhD from the University of California, San Diego. Her research interests lie in Macroeconomics with particular attention to labor, economic history, and development.

Event Details

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

Abstract: 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 search framework where firms and workers jointly choose learning investments. The model equilibrium replicates our empirical lifecycle results and shows that more productive firms provide better learning environments by offering a greater variety of learning options. Counterfactual analyses indicate that (1) the two sources are highly complementary in the aggregate; (2) internal learning is more critical for young workers’ wage growth while external learning is more critical for overall lifetime wage growth; and (3) internal learning plays a key role in driving the lifecycle increase in wage growth and dispersion due to human capital compensation associated with spillover effects for workers who are able to teach their colleagues.