Beyond training: Informal learning, worker agency, and market structure

Abstract:

This paper reconsiders how competition shapes skill development in the labor market. Moving beyond the traditional view that training occurs through formal, firm-led programs, we highlight workers as agents who respond to workplace incentives and take an active role in determining the extent of their own learning. Using linked survey and administrative data on a large sample of Norwegian workers, we show that competitive labor markets promote learning, wage growth, and the development of higher-order skills. Improvements in job performance result primarily from worker-led informal learning, but firms also invest more in formal training in competitive markets.

A pair of vignette experiments from samples of a thousand workers and managers provides evidence on the behavioral foundations of this descriptive pattern, showing that increased worker motivation and competition between firms underlie these associations. These findings challenge canonical predictions and position competition as a catalyst for human capital accumulation rather than a barrier.