Innovation and Employment: Evidence from Italian Microdata

21 Pages Posted: 27 Mar 2003

See all articles by Mariacristina Piva

Mariacristina Piva

Universita Cattolica del Sacro Cuore

Marco Vivarelli

Universita Cattolica del Sacro Cuore, Milano; IZA Institute of Labor Economics

Date Written: February 2003

Abstract

The microeconomic empirical literature devoted to the link between innovation and employment tends to suggest that technological change has a positive effect on jobs, at least at the level of the firm. The main purpose of this paper is to see whether this result still holds in a situation where intermediate technologies are implemented mainly through gross innovative investments, as in Italian manufacturing. Applying GMM-SYS to an employment equation augmented for technology and using a unique longitudinal dataset of 575 Italian manufacturing firms over the period 1992-1997, this paper finds a significant - although small in size - positive relationship between innovation and employment. While the links with sales and wages have the expected signs and turn out to be significant, the job creating impact of innovation proves robust after checking for time, industry, firm's size and geographical fixed effects.

Keywords: Technology, Employment, Italian Manufacturing, GMM-SYS

JEL Classification: O33

Suggested Citation

Piva, Mariacristina and Vivarelli, Marco, Innovation and Employment: Evidence from Italian Microdata (February 2003). IZA Discussion Paper No. 730. Available at SSRN: https://ssrn.com/abstract=389361

Mariacristina Piva

Universita Cattolica del Sacro Cuore ( email )

Via Emilia Parmense, 84
Piacenza
Italy

Marco Vivarelli (Contact Author)

Universita Cattolica del Sacro Cuore, Milano ( email )

Largo Gemelli 1
Milano, 20123
Italy

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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