Although early human capital theory recognized the relevance of workers' experience, its focus was on education and formal training. Recent studies find that much of the performance of newly hired workers is driven by learning by doing or learning from peers or supervisors in the workplace....

This chapter reviews the theoretical and empirical literature on learning by doing. Many of the distinctive theoretical implications of learning by doing have been derived under the assumption that the cost–quantity relationships observed in numerous empirical studies are largely the result of...