From Learning to Knowing: A Psychological–Neurological Approach to Explain the Human Capital Formation Process

By drawing on neurological and psychological theories of learning, our study introduces a new conceptual framework to analyze the role that learning plays in knowledge and skill acquisition. Learning is modelled through four mechanisms defined as individuals’ participation in formal, non-formal and informal learning as well as learning-by-doing. Our analysis demonstrates heterogeneity in how various learning mechanisms affect people’s overall stock of human capital. Additionally, the proposed analytical framework points to the existence of complementarity between the four learning forms and suggests that participation in all of them is needed to maximize the process of human capital formation. These propositions are tested empirically with the Adult Literacy and Life Skills Survey data (2003) utilizing a variety of statistical techniques.JEL: I21, J01, J24, J28, J88