Skilled labor is a key input to the innovation process. A shortage in supply of skilled labor may hence impede … innovation activities, resulting in lower productivity gains. While governments are concerned about these likely negative impacts …, there is only limited empirical evidence whether and to what extent labor shortage affects innovation activities. The paper …

), allows for causal interpretation of the relationship between innovation output and labor productivity. We find that knowledge … intensive services benefit from innovation activities in the sense that these activities causally increase their labor …