The linkage between innovation and labour market performance: some empirical evidence from the Nordic region

Abstract

It is common knowledge that innovations are the drivers of economic growth. However, the direct relationship between innovation and socio-economic performance is questionable. In the article, we examine the linkage between innovation performance, measured by the Summary innovation index, and labour market indicators in Nordic countries, being the leaders of innovation performance and welfare states at the same time. The study shows that employment is growing among people with higher education with the improvement of innovation performance. At the same time, there is a large share of unemployed among low-skilled workers, which also tends to grow. The causality test analysis between Summary Innovation Index and labour statistics by Granger test for panel data does not reveal the causal relationships.