Do Technological Innovations Affect Unemployment? Some Empirical Evidence from European Countries

This paper analyses theoretical and empirical scientific literature about the impact of technological innovations on unemployment, considering the former as a key driver of long-term productivity and economic growth. Using panel data from 25 European countries for the period of 2000–2012, we aim to examine whether technological innovations affect unemployment. We used triadic patent families per million inhabitants as our main proxy for technological innovations, as well as other unemployment controls, in our model, which were estimated using System Generalized Method of Moments (SGMM). Finding no significant relationship between technological innovations and unemployment in our base estimation, we re-estimated it testing the impact with a time lag as well as using alternative proxies for technological innovations. Overall, the research estimations do not suggest that technological innovations have an effect on unemployment.