Innovation and spatial inequality in Europe and USA
AbstractInnovation is a crucial driver of urban and regional economic success. Innovative cities and regions tend to grow faster and have higher average wages. Little research, however, has considered the potential negative consequences: as a small body of innovators gain relative to others, innovation may lead to inequality. The evidence on this point is fragmented, based on cross-sectional evidence on skill premia rather than overall levels of inequality. This paper provides the first comparative evidence on the link between innovation and inequality in a continental perspective. Using micro data from population surveys for European regions and US Cities, the paper finds, after controlling for other potential factors, good evidence of a link between innovation and inequality in European regions, but only limited evidence of such a relationship in the United States. Less flexible labour markets and lower levels of migration seem to be at the root of the stronger association between innovation and income inequality in Europe than in the US.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 9139.
Date of creation: Sep 2012
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Other versions of this item:
- Neil Lee & Andrés Rodríguez-Pose, 2013. "Innovation and spatial inequality in Europe and USA," Journal of Economic Geography, Oxford University Press, vol. 13(1), pages 1-22, January.
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-10-06 (All new papers)
- NEP-CSE-2012-10-06 (Economics of Strategic Management)
- NEP-EUR-2012-10-06 (Microeconomic European Issues)
- NEP-GEO-2012-10-06 (Economic Geography)
- NEP-INO-2012-10-06 (Innovation)
- NEP-KNM-2012-10-06 (Knowledge Management & Knowledge Economy)
- NEP-URE-2012-10-06 (Urban & Real Estate Economics)
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