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Skills and social insurance: Evidence from the relative persistence of innovation during the financial crisis in Europe

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  • Andrea Filippetti
  • Frederick Guy

Abstract

We study private sector investments in innovation in the early days of the financial crisis (between mid 2008 and mid 2009), using a survey covering more than 5,000 firms across 21 European countries. Our interest is in how the stock of skilled labour affects the persistence of investment in innovation during a macroeconomic downturn. We infer differences in skill from national levels of participation in vocational education and training (VET) programmes interacted with levels of employment protection (EP) and unemployment insurance (RR). These forms of insurance should lead VET students to undertake training for skills which are more risky as human capital investments, but potentially more productive. We show that the strongest sustained investment in innovation is associated with a combination of high VET with either strong EP or strong RR. The result supports the view that the supply of skills makes an important contribution to innovation, and that social insurance can encourage socially beneficial risk-taking in educational choices.

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  • Andrea Filippetti & Frederick Guy, 2016. "Skills and social insurance: Evidence from the relative persistence of innovation during the financial crisis in Europe," Science and Public Policy, Oxford University Press, vol. 43(4), pages 505-517.
    • Handle: RePEc:oup:scippl:v:43:y:2016:i:4:p:505-517.
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    File URL: http://hdl.handle.net/10.1093/scipol/scv036
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    Cited by:

    1. Ioramashvili, Carolin, 2024. "Technological invention and local labour markets: evidence from France, Germany and the UK," LSE Research Online Documents on Economics 123630, London School of Economics and Political Science, LSE Library.
    2. Juan Jesus Arenas & Juan Erasmo Gómez & Efraín Ortiz & Freddy Paz & Carlos Parra, 2020. "Elements of the Persistence in Innovation: Systematic Literature Review," Administrative Sciences, MDPI, vol. 10(4), pages 1-14, October.
    3. Ioramashvili, Carolin, 2024. "Technological invention and local labour markets: Evidence from France, Germany and the UK," Research Policy, Elsevier, vol. 53(7).
    4. Paul Lewis, 2020. "Developing Technician Skills for Innovative Industries: Theory, Evidence from the UK Life Sciences Industry, and Policy Implications," British Journal of Industrial Relations, London School of Economics, vol. 58(3), pages 617-643, September.

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