Do Innovative Firms Pay Higher Wages? Micro-Level Evidence from Brazil

Antonio Soares Martins, UNU-MERIT

Several studies have documented a positive and causal relationship between innovation inputs—research and development—and outputs—product or process innovation—and labor productivity. Given the links between labor productivity and wages, a likely implication of this positive relationship is that innovation is associated with higher wages of more productive firms.  This paper explores the relationship between innovation and wages using Brazil’s employer-employee census and a novel measure of innovation derived from the share of technical and scientific occupations of workers in the firm. More importantly, the paper explores the causality between innovation and wages and finds empirical support for the ideas that “self-selection”—firms that innovate already pay higher wages before becoming innovators—and increases in wages associated with starting innovation activity, which are persistent for three years after firms start innovating.

About the speaker

Antonio Martins is a PhD Fellow at United Nations University (UNU-MERIT).  Prior to joining the PhD program, Antonio worked as a consultant at the World Bank and the Economic Commission for Latin America and the Caribbean. Previous experience also includes Associate Economic Affairs Officer at the United Nations and Associate Economist at the Federation of Industries of the State of Ceará. Antonio holds a Master’s degree from the University of São Paulo (Brazil) and a Bachelor’s degree from the Federal University of Ceará (Brazil). Research interest includes Private Sector Development, Labor Economy, and Innovation.

Venue: via Zoom

Date: 22 October 2020

Time: 12:00 - 13:00  CET