Industry knowledge spillovers: Do workers gain from their collective experience?


Individuals acquire experience during their working lives. This is usually thought to contribute to individuals’ human capital and is rewarded in terms of pay. This paper looks at whether individuals’ pay is also affected by the general experience acquired by others working in the same firm or industry. The mechanism in mind is one where individual workers benefit from exchanges of ideas and learning opportunities that arise because of the human capital of their co-workers. Analysing repeated cross-sections of workers within industry sectors and longitudinal linked employer-employee data, I find the data to be consistent with the presence of knowledge spillovers from workers’ general experience levels in the industry and the enterprise.