Labour Market Institutions, Skills, and the Resilience of Innovation During the Financial Crisis in Europe
28 Pages Posted: 17 Mar 2011
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: Suggested Citation
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