Labour Market Institutions, Skills, and the Resilience of Innovation During the Financial Crisis in Europe

28 Pages Posted: 17 Mar 2011

See all articles by Andrea Filippetti

Andrea Filippetti

Italian National Research Council (CNR-ISSIRFA); London School of Economics & Political Science (LSE); University of London - Birkbeck College

Frederick Guy

University of London - Birkbeck College

Date Written: March 14, 2011

Abstract

This paper compares investments in innovation from the early days of the financial crisis up to mid 2009 using a survey covering more than 5,000 firms across twenty one European countries. Our interest is in how differences in labour market institutions and human capital affect a firm’s innovation investment during the recent financial crisis. We find that investment in innovation in Europe during the onset of the financial crisis in 2008-9, was strongest in countries which have both high earnings replacement rates and high participation in vocational education and training; countries with just one were more likely to see reduced innovation, while we find no effect - either positive or negative - from employment protection.

Keywords: varieties of capitalism, labour market institutions, skills, innovation investment, financial crisis, comparative studies

JEL Classification: O3, P51, J5

Suggested Citation

Filippetti, Andrea and Guy, Frederick, Labour Market Institutions, Skills, and the Resilience of Innovation During the Financial Crisis in Europe (March 14, 2011). Available at SSRN: https://ssrn.com/abstract=1785576 or http://dx.doi.org/10.2139/ssrn.1785576

Andrea Filippetti (Contact Author)

Italian National Research Council (CNR-ISSIRFA) ( email )

Via dei Taurini, 19
00185 Rome
Italy

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

University of London - Birkbeck College ( email )

Malet Street
London, WC1E 7HX
United Kingdom

Frederick Guy

University of London - Birkbeck College ( email )

Malet Street
London, WC1E 7HX
United Kingdom

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