The effect of R&D growth on employment and self-employment in local labour markets

Ciarli, Tommaso, Marzucchi, Alberto, Salgado, Edgar and Savona, Maria (2018) The effect of R&D growth on employment and self-employment in local labour markets. Working Paper. SPRU, Sussex.

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Abstract

The paper investigates the effects of firms’ investment in Research and Development (R&D) on employment dynamics in the British local labour markets (Travel to Work Areas). We distinguish between local areas characterised by the initial level of routinised employment of the workforce. We implement a instrumenting strategy to address endogeneity issues in the relation between innovation and employment. Our results suggest that increases in R&D investments mainly affect routinised areas, where the employment created is low skilled, concentrated in non-tradable sectors (like transport, construction) and services. A significant share of the jobs created is self-employment, concentrated in the 25-34 age cohort. We qualify the effect of R&D on self-employment by looking at local firms’ dynamics, which suggest that the increase in self-employment is reflected in a higher number of micro-firms. Rather, in non-routinized areas, R&D results in the expected increase in the demand of high-skilled workers and a reduced demand of low-skill employment.

Item Type: Reports and working papers (Working Paper)
Keywords: O33, J24, D3, Innovation, R&D investments, Employment, Self-employment, Local Labour Markets, Routinisation, Skills
Schools and Departments: University of Sussex Business School > SPRU - Science Policy Research Unit
SWORD Depositor: Mx Elements Account
Depositing User: Mx Elements Account
Date Deposited: 20 Apr 2020 11:42
Last Modified: 07 May 2020 15:53
URI: http://sro.sussex.ac.uk/id/eprint/90926

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