Template-type: ReDIF-Paper 1.0 Author-Name: Crespi, Gustavo Author-Email: gcrespi@iadb.org Author-Workplace-Name: Competitiveness and Innovation Division, Inter-American Development Bank Author-Name: Tacsir, Ezequiel Author-Email: tacsir@merit.unu.edu Author-Workplace-Name: UNU-MERIT/MGSoG Title: Effects of innovation on employment in Latin America Abstract: This study examines the impact of process and product innovation on employment growth and composition in Argentina, Chile, Costa Rica, and Uruguay using micro data from innovation surveys. Based on the model put forward by Harrison et al. (1998), employment growth is related to process innovations and to the growth of sales separately due to innovative and unchanged products. Results show that compensation effects are pervasive and that the introduction of new products is associated with employment growth at the firm level. No evidence of displacement effects due to the introduction of product innovations was observed. With respect to the impact of innovation on employment composition, there is scant evidence of a skill bias, although product innovation is more complementary to skilled than to unskilled labour. Classification-JEL: O12, O14, O31, O33, O40, J21 Keywords: innovation, employment, developing countries, Latin America, innovation surveys Series: UNU-MERIT Working Papers Creation-Date: 2013 Number: 001 File-URL: http://www.merit.unu.edu/publications/wppdf/2013/wp2013-001.pdf File-Format: application/pdf File-Size: 275 Kb Handle: RePEc:unm:unumer:2013001