Effects of innovation on employment in Latin America
Gustavo A. Crespi & Ezequiel Tacsir
#2013-001
This study examines the impact of process and product innovation on
employment growth and composition in Argentina, Chile, Costa Rica, and
Uruguay using micro data from innovation surveys. Based on the model put
forward by Harrison et al. (1998), employment growth is related to
process innovations and to the growth of sales separately due to
innovative and unchanged products. Results show that compensation
effects are pervasive and that the introduction of new products is
associated with employment growth at the firm level. No evidence of
displacement effects due to the introduction of product innovations was
observed. With respect to the impact of innovation on employment
composition, there is scant evidence of a skill bias, although product
innovation is more complementary to skilled than to unskilled labour.
JEL: O12, O14, O31, O33, O40, J21
Keywords: innovation, employment, developing countries, Latin America,
innovation surveys