What is it about?

Innovation could have an ambiguous effect on unemployment. Indeed, it could be nonlinear in the sense that it will increase unemployment until the innovation reaches a threshold level. After that, the opposite effect will appear. Examining the panel data of 61 countries supports this argument.

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Why is it important?

The nonlinear relationship between innovation and unemployment could explain the ambiguity in the empirical results. Besides, it also provides an idea to the policymaker to prepare for countermeasures to mitigate the negative effect of innovation on unemployment at the initial stage of the innovation and automation process.


I hope the research is able to provide a justification for why innovation has an ambiguous effect on unemployment. I also wish this paper will convince policymakers to continue the efforts to promote innovation for the long-term benefit of employment.

Chee-Hong Law
Universiti Sains Malaysia

Read the Original

This page is a summary of: The non‐linear impacts of innovation on unemployment: Evidence from panel data, International Journal of Finance & Economics, September 2022, Wiley, DOI: 10.1002/ijfe.2691.
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