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Economic complexity and jobs: an empirical analysis

Author

Listed:
  • Antonis Adam
  • Antonios Garas
  • Marina-Selini Katsaiti
  • Athanasios Lapatinas

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 70 developed and developing countries with a large number of controls. We show that moving to higher levels of economic sophistication of exported goods leads to less unemployment and more employment, revealing 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 exported goods captures information about the economy's job creation and destruction.

Suggested Citation

  • Antonis Adam & Antonios Garas & Marina-Selini Katsaiti & Athanasios Lapatinas, 2023. "Economic complexity and jobs: an empirical analysis," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 32(1), pages 25-52, January.
    • Handle: RePEc:taf:ecinnt:v:32:y:2023:i:1:p:25-52
    DOI: 10.1080/10438599.2020.1859751
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    Cited by:

    1. Athanasios Lapatinas & Anastasia Litina & Skerdilajda Zanaj, 2021. "The Impact of Economic Complexity on the Formation of Environmental Culture," Sustainability, MDPI, vol. 13(2), pages 1-25, January.
    2. Avom, Désiré & Wendja Simo, Estelle Saraï & Mignamissi, Dieudonné, 2025. "Does illicit capital flight affect the level of economic complexity in developing countries?," International Economics, Elsevier, vol. 184(C).
    3. Ekene ThankGod Emeka & Jonathan E. Ogbuabor & Emmanuel O. Nwosu, 2024. "Effects of public infrastructural development and industrialization on economic complexity in Africa: Emerging insight from panel data analysis," African Development Review, African Development Bank, vol. 36(1), pages 97-110, March.
    4. Raymond L. Aor & Afees A. Salisu, 2026. "Disaggregated Economic Complexity and Inflation in OECD Countries," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 29(1), pages 53-76, February.
    5. Ekene ThankGod Emeka & Jonathan E. Ogbuabor & Davidmac O. Ekeocha, 2024. "Terrorism and economic complexity in Africa: The unconditional impact of military expenditure," African Development Review, African Development Bank, vol. 36(1), pages 139-152, March.
    6. Gomez-Gonzalez, Jose E. & Uribe, Jorge M. & Valencia, Oscar M., 2025. "Sovereign debt cost and economic complexity," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 99(C).
    7. Li, Jun & He, Wei & Li, Guilong, 2024. "Natural resources, economic complexity and growth nexus: Role of digital governance in addressing the resource curse," Resources Policy, Elsevier, vol. 92(C).
    8. Isaac Ketu & Paul Ningaye, 2024. "Sectoral Employment Shares Shape Economic Complexity: Empirical Evidence from African Countries," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 16(2), pages 168-187, May.
    9. 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.
    10. Lapatinas, Athanasios & Litina, Anastasia & Zanaj, Skerdilajda, 2020. "Environmental Culture and Economic Complexity," MPRA Paper 105067, University Library of Munich, Germany.
    11. Gnangnon, Sèna Kimm, 2021. "Do Unilateral Trade Preferences Help Reduce Poverty in Beneficiary Countries?," EconStor Preprints 247346, ZBW - Leibniz Information Centre for Economics.
    12. Gnangnon, Sèna Kimm, 2023. "The Quality of Aid for Trade Flows and Economic Complexity," EconStor Preprints 271538, ZBW - Leibniz Information Centre for Economics.
    13. Behrooz Shahmoradi & Nejla Ould Daoud Ellili, 2024. "Bibliometric review of research on economic complexity: current trends, developments, and future research directions," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 51(4), pages 859-891, December.
    14. Bernardo Caldarola & Dario Mazzilli & Aurelio Patelli & Angelica Sbardella, 2024. "Structural Change, Employment, and Inequality in Europe: an Economic Complexity Approach," Papers 2410.07906, arXiv.org.

    More about this item

    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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