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 impact human capital and wages? Using data from Germany and the US, we document that workers’ reliance on internal learning (learning from coworkers) de-creases with experience, while external learning (on-the-job training) follows an inverted U-shape. Based on this evidence, we develop a search model featuring multiple learning sources whose benefits evolve as workers age and accumulate human capital. Quan-titative results indicate that the interaction between internal and external learning is key to understanding lifecycle wage dynamics and the effects of learning policies and shocks.