THE EFFECT OF INNOVATIVE BEHAVIOR AND TECHNOLOGICAL SPILLOVERS ON EMPLOYMENT GROWTH IN THE US MIDWEST

This study uses an overlapping generations (OLG) model with two labor types and two employment regions to examine factors driving labor migration. Specifically, we examine the effect of innovative behavior on employment growth. Using an OLG model, we test this hypothesis in the Midwestern States of Iowa, Minnesota, Missouri, Kansas, Nebraska, South Dakota, and North Dakota for eight sectors of employment. We find innovative behavior as measured by patents has a positive effect on employment growth in all sectors studied for the growth period 1969-99.