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Inequality and Innovativeness

Author

Listed:
  • Scott E Page

    (University of Michigan)

  • John Vandermeer

    (University of Michigan)

Abstract

In this note, we construct two theoretical models that analyze the relationship between inequality of access and rates of innovation as well as correlative data that show a negative correlation between income inequality and levels of innovativeness. Our two models suggest that unequal access to problems slows innovation by reducing the level and variety of human capital applied to problems. More interestingly, both models show that the rate of innovation decline becomes much more pronounced as problems become more difficult. Thus, the costs of inequality may be increasing as the problems that societies face become more challenging.

Suggested Citation

  • Scott E Page & John Vandermeer, 2013. "Inequality and Innovativeness," Economics Bulletin, AccessEcon, vol. 33(1), pages 1-59.
    • Handle: RePEc:ebl:ecbull:eb-13-00126
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Diversity; Inequality; Innovation; Problem Solving;
    All these keywords.

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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