Economic complexity and jobs: an empirical analysis

Abstract

This paper analyses the impact of economic complexity on the labour market using annual data on OECD countries for the period 1985-2008 and averaged data over the period 1990-2010 for 70 developed and developing countries with a large number of controls. We show that moving to higher levels of economic sophistication of exported goods leads to less unemployment and more employment, revealing that economic complexity does not induce job loss. Our findings remain robust across alternative econometric specifications. Furthermore, we place the spotlight on the link between products' embodied knowledge (sophistication) and labour market outcomes at the micro-level. We build a product-level index that attaches a product to the average level of unemployment (or employment) in the countries that export it. With this index, we illustrate how the development of sophisticated products is associated with changes in the labour market and show that the economic sophistication of exported goods captures information about the economy's job creation and destruction.

[Retracted] An Empirical Study on the Relationship between New Energy Vehicle’ Export Sophistication and Industrial Structure Upgrading in China

“…FDI contributes to economic growth only when a sufficient absorptive capability of advanced technologies is available in the host economy. Economic development should align with the fundamental structure of capital and labour [ 21 ]. It must adhere to the economy's competitive advantage to accomplish long-term accumulation and constant upgrading of the industrial design to create sustainable economic growth.…”

Economic complexity and entrepreneurship: insights from Africa

“…A number of studies have examined the nexus between economic complexity and different economic variables, basically to understand national structural transformations process through product sophistications and export activities for national development (Du and O’Connor, 2019; Saadi, 2020; Adam et al , 2021). They suggest that economic complexity has important implications for national entrepreneurial development (Du and O’Connor, 2019; Nguyen et al , 2021).…”

Economic complexity, scientific productivity and income inequality in developing economies

“…In their study, Adam, et al. (2021) found that economic complexity affects unemployment rates in developed countries and argued that people in a less complex economy face more limited employment opportunities. In contrast, living in a complex economy combined with the growth of high‐tech products provides more employment opportunities for people in the community, allows for higher income levels and reduces inequality in the distribution of income.…”