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Economic complexity and jobs: an empirical analysis

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  • Adam, Antonis
  • Garas, Antonios
  • Lapatinas, Athanasios

Abstract

This paper analyses the impact of economic complexity on the labour market using annual data on OECD countries for the period 1985-2008 and averaged data over the period 1990-2010 for 74 developed and developing countries with a large number of controls. We show that moving to higher levels of economic sophistication leads to less unemployment and more employment, showing that economic complexity does not induce job loss. Our findings remain robust across alternative econometric specifications. Furthermore, we place the spotlight on the link between products’ embodied knowledge (sophistication) and labour market outcomes at the micro-level. We build a product-level index that attaches a product to the average level of unemployment (or employment) in the countries that export it. With this index, we illustrate how the development of sophisticated products is associated with changes in the labour market and show that the economic sophistication of an economy captures information about the economy’s job creation and destruction.

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  • Adam, Antonis & Garas, Antonios & Lapatinas, Athanasios, 2019. "Economic complexity and jobs: an empirical analysis," MPRA Paper 92401, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:92401
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    Cited by:

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    2. Chien-Chiang Lee & En-Ze Wang, 2021. "Economic Complexity and Income Inequality: Does Country Risk Matter?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 154(1), pages 35-60, February.
    3. Lapatinas, Athanasios & Litina, Anastasia & Zanaj, Skerdilajda, 2020. "Environmental Culture and Economic Complexity," MPRA Paper 105067, University Library of Munich, Germany.
    4. Gnangnon, Sèna Kimm, 2021. "Do Unilateral Trade Preferences Help Reduce Poverty in Beneficiary Countries?," EconStor Preprints 247346, ZBW - Leibniz Information Centre for Economics.
    5. Gnangnon, Sèna Kimm, 2023. "The Quality of Aid for Trade Flows and Economic Complexity," EconStor Preprints 271538, ZBW - Leibniz Information Centre for Economics.

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    More about this item

    Keywords

    economic complexity; product sophistication; unemployment; employment;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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