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Mario Pianta (Scuola Normale Superiore)

4 March 2022 @ 12:30 - 13:30


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4 March 2022
12:30 - 13:30
Event Category:
Academic Events

The good jobs-high innovation virtuous circle”

Absract. This article investigates the existence of a virtuous circle between industries’ employment quality, their ability to introduce new products, increase labour productivity and pay higher wages. We develop a simultaneous four-equation model investigating empirically four related variables: first, the rise of non-standard work as a proxy of low employment quality; second, the success in developing new products and services; third, labour productivity growth; fourth, wage increases. The model is tested empirically for 41 manufacturing and service sectors of six European economies (Germany, France, Italy, Spain, the Netherlands, and the UK) over the period 1996-2016. The findings provide novel evidence of mutually reinforcing relationships, where higher employment quality complements technological activities, leading to more product innovations that increase productivity growth. In turn, the latter allows wage increases that contribute to higher employment quality. These combined moves towards higher-quality labour and higher-quality capital are at the root of what we define as the good jobs-high innovation virtuous circle.