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Technological change and employment: is Europe ready for the challenge?

Author

Listed:
  • Mariacristina Piva

    (Università Cattolica del Sacro Cuore)

  • Marco Vivarelli

    (Università Cattolica del Sacro Cuore
    UNU-MERIT
    IZA)

Abstract

The aim of this paper is twofold. On the one hand, the economic insights on the employment impact of technological change are discussed covering both classical theories and updated theoretical and empirical analyses. On the other hand, an empirical test is provided; in particular, longitudinal data—covering manufacturing and service sectors over the 1998–2011 period for 11 European countries—are used to run GMM-SYS and LSDVC estimates. Two are the main results: (1) a significant labor-friendly impact of R&D expenditures (mainly related to product innovation) is found; yet, this positive employment effect appears to be entirely due to medium and high-tech sectors, while no effect can be detected in low-tech industries; (2) capital formation is found to be negatively related to employment; this outcome suggests a possible labor-saving effect due to the embodied technological change incorporated in gross investment (mainly related to process innovation).

Suggested Citation

  • Mariacristina Piva & Marco Vivarelli, 2018. "Technological change and employment: is Europe ready for the challenge?," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 8(1), pages 13-32, March.
  • Handle: RePEc:spr:eurasi:v:8:y:2018:i:1:d:10.1007_s40821-017-0100-x
    DOI: 10.1007/s40821-017-0100-x
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    More about this item

    Keywords

    Technological change; Employment; Sectoral analysis; EU;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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