Flexible labor and innovation performance
Evidence from longitudinal firm-level data
More Info
expand_more
expand_more
Abstract
Firms with high shares of workers on fixed-term contracts have significantly higher sales of imitative new products but perform significantly worse on sales of innovative new products (“first on the market”). High functional flexibility in “insider-outsider” labor markets enhances a firm’s new product sales, as do training efforts and highly educated personnel. We find weak evidence that larger and older firms have higher new product sales than do younger and smaller firms. Our findings should be food for thought to economists making unqualified pleas for the deregulation of labor markets.
Files
EMI_Discussion_Paper_Series_20... (pdf)
(pdf | 0.253 Mb)