DT 20-25 Revisiting the Analysis of Innovation on Employment: An Analysis for Uruguay

Abstract

Employment has been a major preoccupation in developing countries facing technical progress. Thus, understanding the impact of technological change on employment is at the center of the policy debate. The objective of this work is to analyze the effect of innovation on labor demand, and the skill composition of the labor force. The data for this study come from the Innovation Surveys for Uruguay over the 2000-2021 period. We analyze the whole sample and manufacturing and service sectors according to technological/knowledge intensity. Using quantile regressions, our results show that innovation has a positive effect on employment and skilled labor growth. Usually, the impact of innovation is higher for skilled labor and at lower levels of the distribution. The results are heterogeneous according to technological intensity, and economic sector. These findings contribute to deepen the analysis of the effects of innovation on employment in Uruguay, providing new evidence with respect to previous studies.

Keywords: Employment, Skilled Labor, Product Innovation, Process Innovation.