Add to ORKGThe aim of this chapter is twofold. On the one hand, the economic insights on the employment impact of technological change are discussed considering both theories and empirical studies. On the other hand, an empirical test is provided: longitudinal data \u2013 covering manufacturing and service industries over the 1998-2011 period in 11 European countries \u2013 are used to run GMMSYS estimates. Two are the main results: 1) a significant labor-friendly impact of R&D expenditures (related to product innovation) is found; 2) capital formation turns out to be negatively related to employment; this outcome suggests a possible labor-saving effect due to the embodied technological change incorporated in gross investment (related to process innov...