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Linking R&D Expenditure to Labour Market and Economic Performance: Empirical Evidence from the European Union

Author

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  • Wojciech Chmielewski

    (Department of Finance and Accounting, Faculty of Management, University of Warsaw, ul. Szturmowa 1/3, 03-678 Warszawa, Poland)

  • Marta Postuła

    (Department of Finance and Accounting, Faculty of Management, University of Warsaw, ul. Szturmowa 1/3, 03-678 Warszawa, Poland)

  • Krzysztof Gawkowski

    (Faculty of Management and Logistics, Helena Chodkowska University of Technology and Economics, ul. Jutrzenki 135, 02-231 Warszawa, Poland)

Abstract

This article examines how research-and-development (R&D) expenditure—as a share of GDP—both in total and disaggregated by sector (business enterprise and government)—shapes key socioeconomic outcomes in the EU-27. Drawing on Eurostat panel data for 2013–2022, we estimate fixed- and random-effects models with sector-specific lags. Business R&D expenditure is associated with lower female and male unemployment and faster GDP growth. Government R&D expenditure, by contrast, widens the gender pay gap and dampens GDP per capita after two years, although it attracts foreign direct investment in the short and medium term. The diminishing impact of R&D over time underscores the need for policies that sustain innovation benefits.

Suggested Citation

  • Wojciech Chmielewski & Marta Postuła & Krzysztof Gawkowski, 2025. "Linking R&D Expenditure to Labour Market and Economic Performance: Empirical Evidence from the European Union," Sustainability, MDPI, vol. 17(14), pages 1-25, July.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:14:p:6595-:d:1705210
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