Learning-by-Doing when Times Are Tough: Evidence from the Great Recession

Abstract

We analyse potential macroeconomic determinants of worker learning curves by matching exogenous changes in macroeconomic conditions during the Great Recession to high-frequency data on worker productivity from supermarkets. We find evidence of a statistically significant learning curve among new cashiers. Despite finding that higher unemployment rates induce greater effort by workers in general, the learning rate is stronger for cashiers who started work during an economic upturn, while worsening macroeconomic conditions engender a shallower learning curve. Hence, weakening labour markets are not associated with stronger learning rates on average. This analysis yields important implications for firms and policy-makers in understanding worker behaviour on the job across business cycles.