Technological Innovation and Employment: Complements or Substitutes?

Abstract

In this paper we study the impact of innovation activities on employment. We develop an empirical strategy based on Jaumandreu (2003) whichaccounts for differences between product and process innovations. Using microdata at a firm level for the period 1998-2001, we found that product innovations affect positively and significantly employment levels in Chile. On the other hand there is no evidence to suggest that process innovations significantly affect employment after controlling for investment and sectorial patterns. These findings are of extremely interest in the current discussion about technological innovation policy in Chile.