Do innovative firms pay higher wages? Micro-level evidence from Brazil

Xavier Cirera and Antonio Soares Martins-Neto

Research Policy, 2023, vol. 52, issue 1

Abstract: This paper explores the relationship between innovation and wages using Brazil’s employer–employee census (RAIS) and a novel measure of innovation derived from the share of technical and scientific occupations of workers. The results show a robust and positive wage premium associated with innovative firms. The decomposition of this innovation-related wage premium suggests that it is larger for workers in manufacturing, although also positive and significant for those in agriculture and services; and larger for large firms. More importantly, the paper explores the causality between innovation and wages. First, we find some empirical support for “self-selection” — firms that innovate already pay higher wages before becoming innovators. Second, we find strong evidence of wage increases associated with starting innovation activity, which are persistent for three years after firms start innovating. Innovation pays off also for workers.

Keywords: Innovation; Wage premium; Skills; Brazil (search for similar items in EconPapers)
JEL-codes: J31 O30 O54 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0048733322001664
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Do Innovative Firms Pay Higher Wages?: Micro-Level Evidence from Brazil (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:respol:v:52:y:2023:i:1:s0048733322001664

DOI: 10.1016/j.respol.2022.104645

Access Statistics for this article

Research Policy is currently edited by M. Bell, B. Martin, W.E. Steinmueller, A. Arora, M. Callon, M. Kenney, S. Kuhlmann, Keun Lee and F. Murray

More articles in Research Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().