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Technological progress and innovation have varying impacts on employment. Recent studies suggest that there is no clear-cut answer, likely due to oscillations in the relationship between innovation and employment. We explored this relationship using a dynamic regression model, incorporating variables of employment through total labor force and innovation through the Innovation Program 5 in OECD countries and by IP5 and the Patent Cooperation Treaty in non-OECD countries. We confirmed the presence of significant positive effects of the IP5 variable on employment in OECD countries and significant positive effects of the PCT variable in non-OECD countries, via the estimation of the two-step SYS-GMM method in stata. Our conclusion was that deploying this methodology enabled us to underscore the oscillations of effects contingent upon the selected innovation proxy, across time, and the classifications applied.
