On-the-job training: A skill match approach to the determinants and outcomes of lifelong learning

Lifelong learning research focuses on formal training, documenting a positive correlation between initial education and continuing training. This “training gap” research disregards two important distinctions: (a) between formal and informal training, and (b) between employee skill supply and job demand. A complete account of work-life human capital formation requires simultaneous analysis of formal and informal activities, and of workers current qualifications and the skill requirements of their current jobs. Less-educated workers may hold jobs with low skill requirements providing little training since the use of high skills is irrelevant. Examining workplace training in Sweden, on the basis of indicators from the Swedish Level of Living Surveys (LNU), we find that informal training quantitatively dominates formal and that both are unequally distributed across skill categories. Job requirements essentially determine the incidence of training, while the net impact of individual education is very small. Employer decisions regarding how to structure jobs and whom to hire appear to be the primary factors behind the training gap in lifelong learning.