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Innovation and Employment in Economic Cycles

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  • Matteo Lucchese

    (1] ISTAT, Italian National Institute of Statistics, Via Tuscolana 1782, 00173, Rome, Italy[2] Department of Economics Society Politics, University of Urbino, Via Saffi 42, 61029, Urbino (PU), Italy)

  • Mario Pianta

    (1] Department of Economics Society Politics, University of Urbino, Via Saffi 42, 61029, Urbino (PU), Italy[2] Centro Linceo Interdisciplinare, Accademia Nazionale dei Lincei, Rome, Italy)

Abstract

This article explores the way economic cycles influence the relationship between innovation and employment in manufacturing industries. We investigate whether the ups and downs of cycles alter the possibility of exploiting technological opportunities and affecting patterns of job creation. A model that explains industries’ employment change by combining technology and demand is proposed; the empirical test is based on data on 21 manufacturing sectors from 1995 to 2007 for Germany, France, Italy, the UK, the Netherlands and Spain. Results show that, in upswings, employment change is affected by new products, exports and wage growth, while during downswings new processes contribute to restructuring and job losses.

Suggested Citation

  • Matteo Lucchese & Mario Pianta, 2012. "Innovation and Employment in Economic Cycles," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 54(2), pages 341-359, June.
    • Handle: RePEc:pal:compes:v:54:y:2012:i:2:p:341-359
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    More about this item

    JEL classification:

    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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