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The Innovation†Employment Nexus: A Critical Survey Of Theory And Empirics

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  • Flavio Calvino
  • Maria Enrica Virgillito

Abstract

Understanding whether technical change is beneficial or detrimental for employment is at the center of the policy debate, especially in phases of economic recession. So far, the effects of innovation – in its manifold declinations and intrinsic complexity – on labor demand have proven to be not unequivocal. This essay critically reviews the role of technical change in shaping employment dynamics at different levels of aggregation. First, it disentangles theoretically the role of different compensation mechanisms through which employment adjusts after an innovation is introduced. Second, it critically presents the most recent empirical evidence on the topic, with a focus on methods and limitations. Finally, it provides an attempt to conceptualize a number of stylized facts and empirical regularities on the innovation†employment nexus.

Suggested Citation

  • Flavio Calvino & Maria Enrica Virgillito, 2018. "The Innovation†Employment Nexus: A Critical Survey Of Theory And Empirics," Journal of Economic Surveys, Wiley Blackwell, vol. 32(1), pages 83-117, February.
    • Handle: RePEc:bla:jecsur:v:32:y:2018:i:1:p:83-117
    DOI: 10.1111/joes.12190
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