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Impact of innovation on employment in quantitative terms: review of empirical literature based on microdata

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  • Heijs, Joost
  • Arenas Díaz, Guillermo
  • Vergara Reyes, Delia Margarita

Abstract

Because of the alarming discussion about robotisation and the potential loss of jobs, the effect of technological change on employment is back at the center of social debate. This study reviews the empirical evidence of 44 micro-level studies on the quantitative impact of innovation on employment, offering a systematic review of the methodologies used, (control) variables and data sets. It tries to explain their contradictory results and shortcomings and summarize their conclusions, offering a new taxonomy of the studies. Although we analyze all types of studies, the main part of our review is focused on two basic models. The first one is the static input-oriented model of Van Reenen (1997) and Bogliacino et al. (2008 and 2014), which shows a positive effect of R&D expenditures on employment. The second one is the dynamic output-oriented model of Harrison et al. (2008), which shows a positive effect of product innovation on employment and contradictory effects for process innovation. Most studies confirm the expected negative effect of process innovation. However, others (especially those which analyze low-income countries and low- tech sectors) reflect non-significant relationships. Further on, some conclusions, final critical remarks about detected limitations and contradictions and possible future lines of research will be presented.

Suggested Citation

  • Heijs, Joost & Arenas Díaz, Guillermo & Vergara Reyes, Delia Margarita, 2019. "Impact of innovation on employment in quantitative terms: review of empirical literature based on microdata," MPRA Paper 95326, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:95326
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    References listed on IDEAS

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    More about this item

    Keywords

    innovation effects on employment; endogeneity; process and product innovation;
    All these keywords.

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • 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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