This paper examines the effects of innovation on the labor market, more
clearly employment dynamics by analyzing the relationship between different measures of innovation and unemployment rate. It reviews existing
literature on the link between these two variables and analyzes the argument for and against the adverse effects of innovation. Taking into account
that there are different types of measures of innovation, firstly, the author
tries to find the most relevant one of them. Paper concludes that there is no evidence to believe that innovation increases
unemployment rates. By contrast, it is observed that the unemployment rate
is almost always around its natural level in countries with a high innovation
level. However, it is not true to state that innovation decreases the unemployment rate. To get more reliable results, one should distinguish between high-skilled and low-skilled labor, because innovation and new technologies affect
them differently. Additionally, a high innovation level is mainly observed in
developed countries, which means that the low unemployment rate may be
the result of other economic variables, not innovation.
Citation:
Mammadzade, I., & Eynizada, N. (2019). Impacts of innovation on labor market: Descriptive analysis. ASERC Journal of Socio-Economic Studies, 2(2), 94-106. DOI:10.30546/2663-7251.2.2.94