The Impact on Job-Quality of Firm-Level Support to Innovation: Evidence from Natural Experiment Conditions and Linked Employer-Employee Data in Portugal

Daniele Bondonio, Teresa Farinha and Ricardo Paes Mamede

Evaluation Review, 2022, vol. 46, issue 5, 626-651

Abstract: Public support to firm-level investments in innovation is one of the main mechanisms through which the European Union promotes socioeconomic convergence among regions and the creation of quality jobs is considered a necessary condition for the convergence of disadvantaged regional economies. This paper exploits the availability of natural experiment conditions and linked employer-employee microdata in Portugal to offer empirical evidence on the impact on relevant job-quality outcomes of a large EU-cohesion-policy program to support SMEs’ innovation investments. The analysis is implemented by means of stratification/coarsened exact matching model, combined with a difference in difference scheme, suitable to the specific impact identification conditions. Our results indicate that the policy intervention in Portugal had a positive impact on job-quality outcomes, with each supported firm generating an average of 4.9 additional standard-working-time jobs, +2.9 skilled jobs, and +2.0 permanent-contract jobs, compared to a counterfactual scenario of no public support. These impacts were at a cost of about 16,100€, 27,100€ and 39,400€ in public subsidies per additional job, respectively. We also estimate that the program impact was responsible for a 2.20€ (+17.8%) increase of the per-hour remuneration. These findings are robust to sensitivity analysis, in terms of alternative matching procedures and comparison groups, and they highlight the fact that increasing job-quality is a policy goal that can be pursued, at a reasonable cost, also by means of cohesion-policy support to innovation aimed at enhancing the competitiveness of SMEs. JEL classification: O1; R5; C23

Keywords: cohesion policy; public support to innovation; job-quality; counterfactual impact evaluation (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/0193841X221074765 (text/html)

Related works:
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:sae:evarev:v:46:y:2022:i:5:p:626-651

DOI: 10.1177/0193841X221074765

Access Statistics for this article

More articles in Evaluation Review
Bibliographic data for series maintained by SAGE Publications ().