Innovation and Job Creation in a Dual Labor Market: Evidence from Spain

21 Pages Posted: 23 May 2011

See all articles by David Giuliodori

David Giuliodori

affiliation not provided to SSRN

Rodolfo Stucchi

InterAmerican Development Bank

Date Written: May 31, 2010

Abstract

This paper studies the effect of product and process innovations on the creation of jobs in the Spanish manufacturing sector over the period 1991-2005. We also use a change in the Employment Protection Legislation (EPL) in 1997 to study the effect of innovations on permanent and temporary workers before and after that change. We find that both product and process innovation created jobs in the Spanish manufacturing sector. Additionally, we find that before the change in the EPL in 1997 innovations did not affect the number of permanent workers and all the increase in employment was explained by the increase in the number of temporary workers. After the change in the labor regulations, innovations increased both the number of temporary and permanent employees. Interestingly, while the increase in temporary workers takes place after one year of the innovations, the increase in permanent workers occurs mainly two year after the innovations.

Keywords: Product Innovation, Process Innovation, Employment, Temporary Workers

JEL Classification: J21, J38, L60, O31

Suggested Citation

Giuliodori, David and Stucchi, Rodolfo, Innovation and Job Creation in a Dual Labor Market: Evidence from Spain (May 31, 2010). Available at SSRN: https://ssrn.com/abstract=1849043 or http://dx.doi.org/10.2139/ssrn.1849043

David Giuliodori

affiliation not provided to SSRN ( email )

Rodolfo Stucchi (Contact Author)

InterAmerican Development Bank ( email )

1300 New York Avenue NW
Washington, DC 20577
United States
+1 (202) 5237619 (Phone)

HOME PAGE: http://https://www.sites.google.com/site/rodolfostucchi/

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