Linking R&D Expenditure to Labour Market and Economic Performance: Empirical Evidence from the European Union

Wojciech Chmielewski (), Marta Postuła and Krzysztof Gawkowski
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Wojciech Chmielewski: Department of Finance and Accounting, Faculty of Management, University of Warsaw, ul. Szturmowa 1/3, 03-678 Warszawa, Poland
Marta Postuła: Department of Finance and Accounting, Faculty of Management, University of Warsaw, ul. Szturmowa 1/3, 03-678 Warszawa, Poland
Krzysztof Gawkowski: Faculty of Management and Logistics, Helena Chodkowska University of Technology and Economics, ul. Jutrzenki 135, 02-231 Warszawa, Poland

Sustainability, 2025, vol. 17, issue 14, 1-25

Abstract: This article examines how research-and-development (R&D) expenditure—as a share of GDP—both in total and disaggregated by sector (business enterprise and government)—shapes key socioeconomic outcomes in the EU-27. Drawing on Eurostat panel data for 2013–2022, we estimate fixed- and random-effects models with sector-specific lags. Business R&D expenditure is associated with lower female and male unemployment and faster GDP growth. Government R&D expenditure, by contrast, widens the gender pay gap and dampens GDP per capita after two years, although it attracts foreign direct investment in the short and medium term. The diminishing impact of R&D over time underscores the need for policies that sustain innovation benefits.

Keywords: R&D expenditure; unemployment; economic growth; gender pay gap; foreign direct investment (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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