The influence of technological innovation on labor force participation: Cross-country evidence
The influence of technological innovation on labor force participation:
Structural and economic changes have led to the alteration in labor force participation (LFP) across the globe. This research pays attention to the role of technological innovation on labor force participation, especially for both male (MLFP) and female (FLFP). The main objective is to investigate whether technological advancement can adjust LFP, MLFP, and FLFP. The study collects data from the World Bank during the period of 2000 – 2018, including 197 countries around the world. The research applies two different econometric approaches, static and dynamic respectively. The static approach does not take the lagged dependent variable into account, while the dynamic one considers the lagged dependent variable. Out of the three techniques, the most suitable one is Random Effect Model for the static approach. In the dynamic approach, the paper uses the System GMM technique. The usage of different techniques can help check the robustness and consistency of all research models. Besides, the study recommends that the government should advance technological innovation to encourage women to participate in the labor force.
Keywords: technological innovation, labor force participation, R&D expenditure, System GMM.