Effects of innovation on employment in Latin America

Crespi, Gustavo and Tacsir, Ezequiel (2011): Effects of innovation on employment in Latin America. Unpublished.

Abstract

This study examines the impact of process and product innovation on employment growth across four Latin American countries (Argentina, Chile, Costa Rica, and Uruguay) using micro data from innovation surveys. Specifically, we relate employment growth to process innovations and to the growth of sales separately due to innovative and unchanged products. Results show that that compensation effects are prevalent, and the introduction of new products is associated with employment growth at the firm level. Specifically, we find that for the manufacturing firms as a whole, the introduction of process innovations only affects the employment growth in the countries case of Chile. At the same time, we observe no evidence of displacement effects due to the introduction of product innovations. In fact, the observed compensation effects resulting from the introduction of new products imply, in turn, employment growth even when the replacement of old products is taken into account.

• Item Type: MPRA Paper
• Language: English
• Keywords: Innovation, Employment; Developing countries; Latin America; Innovation surveys
• Subjects: O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O31 - Innovation and Invention: Processes and Incentives; J - Labor and Demographic Economics > J2 - Time Allocation, Work Behavior, and Employment Determination and Creation; Human Capital; Retirement > J23 - Employment Determination; Job Creation; Demand for Labor; Self-Employment

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