Recent literature on economic growth emphasizes the role of human capital as "engine of growth". Most of this literature simply assumes that accumulated productive knowledge spills over and benefits all agents in the economy, without much attention to the process by which different agents learn from each other. This paper analyzes the role of labor mobility in the transmission of existing productive knowledge and in the creation of new productive knowledge. The working of the labor market and the processes of training and schooling are described in sufficient detail to allow analysis of specific labor market policies. Particular attention is given to the possible consequences of restrictions on labor mobility, such as minimum wage legislation, which characterize developing economies. It is shown that such restrictions can impede growth.