The impact of R & D subsidies on R & D employment composition

In this article, we examine the impact of subsidies granted at national and regional levels on a set of research and development (R & D) employment variables, and we specifically seek to identify the existence of additional effects of these public subsidies on the R & D human resources of firms. We begin by assessing the effects of public funds on private R & D expenditure and on the number of R & D employees, and then focus on the impact of these funds on the composition of human resources engaged in R & D classified by occupation and level of education. The data used are from the Spanish Technological Innovation Panel for the period 2006-2011. To control for selection bias and endogeneity, a combination of nonparametric matching techniques is used. Our results show that R & D subsidies increase the number of R & D employees, but no contemporaneous increase is found in the average level of qualification of R & D staff members in subsidized firms. Nevertheless, in the subsequent years there is a positive effect on the recruitment of PhD holders. The effects of public support are heterogeneous and are dependent on the source of the subsidy and the firms' characteristics.