Raj Chetty from Stanford will present, “The Lifecycle of Inventors,” a joint effort with Alex Bell, Xavier Jaravel, Neviana Petkova, and John van Reenen. As usual, it will be in Cheit 320 on Wednesday, 12:40-2pm. The abstract is below:
We match administrative tax data on income to the population of patent grants and applications in order to analyze the lifecycle of 1.2 million US inventors from 1996 to 2012. Children of parents in the top 1% of the income distribution are ten times more likely to become inventors than those in the bottom 50%. Large differences in invention rates also exist by gender and race. Test score data from third grade and above suggests that the majority of these differences are not due to to innate ability but primarily result from the environmental conditions in which the potential inventors grow up. Decompositions indicate that income-innovation gaps can largely be accounted for by differences in human capital acquisition and early exposure to innovation via families, parental colleagues and neighborhoods. These associations are evident for overall patenting and persist at the detailed technology class level. We also document that the financial returns to innovation are extremely skewed and uncertain at the start of a career. While our analysis does not directly identify the causal mechanisms that drive innovation, our descriptive findings shed light on which types of policy tools are likely to be most effective in sparking innovation. In particular, “supply side” policies targeted at drawing more talented individuals into innovation have great potential.
Last week, we heard from Robert Fairlie from UCSC, who presented evidence that entrepreneurship training programs may not be effective.