Lindner Attila, Muraközy Balázs, Reizer Balázs
Skill-Biased Innovation Activities: Evidence from Hungarian Firms
This paper investigates the consequences of innovation activities. We exploit a unique firm-level survey linked to employee data from Hungary that allows us to examine broadly defined innovation activities including the introduction of new products, process innovation and organizational innovation. We show that these innovation activities are skill-biased insofar as they lead to an increase both in the share of college educated workers and in their wage premium. The skill bias is not solely driven by high-novelty, R\&D-based innovation, but also, to a comparable extent, by the low-novelty kind. Among low-novelty innovation types, product and process innovation are the most skill-biased, while organizational innovation is less so. These results highlight that low-novelty innovations contribute substantially to wage inequality.