Beyond Training: Worker Agency, Informal Learning, and Competition

Abstract

We study how labor market competition shapes workplace skill development. Using large-scale linked survey and administrative data from Norway, complemented by vignette experiments with workers and managers, we show that human capital accumulation is greater in competitive markets. This pattern is driven primarily by workers’ own learning efforts rather than firm-provided training. Competition strengthens worker incentives by improving outside options, tightening the link between productivity and pay, and fostering informal learning. Most skill accumulation occurs through learning-by-doing, self-study, and peer interaction, and is concentrated in higher-order, transferable skills. Firms in competitive markets also invest more in training, consistent with higher returns to skill investment despite greater poaching risk. Together, the findings challenge the view that competition suppresses training and instead highlight its role as a catalyst for human-capital accumulation.