Accumulating valuable work experience: the importance of large firms and big cities [Preprint]

Using linked employer-employee data on employment biographies of workers in Germany, this paper analyzes where valuable work experience is primarily acquired. It distinguishes between learning effects related to firm size and city size. We show that wages increase with both the size of the cities and establishments in which experience was accumulated. Around one quarter of the dynamic agglomeration benefits can be attributed to gaining experience in large firms. We provide evidence on two potential explanations for the role of size: formal training increases with firm size and the frequency of job changes with city size.