R&D and Employment: Some Evidence from European Microdata

Francesco Bogliacino, Mariacristina Piva and Marco Vivarelli ()

No 5908, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: After discussing theory regarding the consequences of technological change on employment and surveying previous microeconometric literature, our aim with this paper is to test the possible job creation effect of business R&D expenditures, using a unique longitudinal database covering 677 European manufacturing and service firms over the period 1990-2008. The main outcome from the whole sample dynamic LSDVC (Least Squared Dummy Variable Corrected) estimate is the labour-friendly nature of companies’ R&D, the coefficient of which turns out to be statistically significant, although not very large in magnitude. However, the positive and significant impact of R&D expenditures on employment is detectable in services and high-tech manufacturing but absent in the more traditional manufacturing sectors. This means that we should not expect positive employment effects from increasing R&D in the majority of industrial sectors. This is something that should be borne in mind by European innovation policy makers having employment as one of their specific aims.

Keywords: services; innovation; employment; manufacturing; LSDVC (search for similar items in EconPapers)
JEL-codes: O33 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2011-08
New Economics Papers: this item is included in nep-eur, nep-ino, nep-knm, nep-lab, nep-sbm and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published - short version published as 'R&D and employment: An application of the LSDVC estimator using European microdata' in: Economics Letters, 2012 (1), 116, 56-59

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