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This paper uses matched employee-employer data from the UK augmented
with information on R&D expenditures, to analyze the relationship between innovativeness of the firm and the wages of workers in occupations with different levels of skills. We show that more R\&D intensive firms pay higher wages on average. The premium to working in a R&D
intensive firm is higher for workers in low-skilled occupations than for workers in high-skilled occupations.
We develop a simple model of the firm where the complementarity between workers in high-skilled and low-skilled occupations increases with the firm's innovativeness. An additional prediction of the model, which is also confirmed by the empirical analysis, is that the tenure of workers in low-skilled occupations is longer in more innovative firms than in less innovative firms.
