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Shedding Light on Inventors' Returns to Patents

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  • Depalo, Domenico
  • Di Addario, Sabrina

Abstract

We estimate individual returns to patents using a unique longitudinal administrative dataset on patents and earnings, following individuals and rms for 20 years (1987-2006). We nd that inventors' wages steadily increase before patent applications are submitted to the EPO, peak in the year preceding their ling, and then decrease again. We take the fact that earnings peak at t-1 instead of at t as a bureaucratic delay between the time the invention really takes place and the time when the rm submits the application. We also nd that the applications that will eventually lead to a granted patent receive a greater wage increase than those who will not. Finally, we use an event study framework to distinguish among inventor-types, and we nd that the \star-inventors" (the employees submitting at least three times in their life) receive a lasting wage premium, while the employees with one or two submissions stop receiving the premium after the application date.

Suggested Citation

  • Depalo, Domenico & Di Addario, Sabrina, 2014. "Shedding Light on Inventors' Returns to Patents," Institute for Research on Labor and Employment, Working Paper Series qt6pd795kq, Institute of Industrial Relations, UC Berkeley.
  • Handle: RePEc:cdl:indrel:qt6pd795kq
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    References listed on IDEAS

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    Cited by:

    1. Dorner, Matthias & Fryges, Helmut & Schopen, Kathrin, 2015. "Wages in high-tech start-ups - do academic spin-offs pay a wage premium?," IAB Discussion Paper 201517, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    2. Diego d'Andria, 2016. "Employed inventors, inter-firm mobility, bonus pay with multi-stage R&D processes, and optimal innovation policy," JRC Working Papers on Taxation & Structural Reforms 2016-02, Joint Research Centre (Seville site).
    3. Jaravel, Xavier & Petkova, Neviana & Bell, Alex, 2018. "Team-specific capital and innovation," LSE Research Online Documents on Economics 87653, London School of Economics and Political Science, LSE Library.
    4. Akcigit, Ufuk & Grigsby, John & Nicholas, Tom, 2017. "The Rise of American Ingenuity: Innovation and Inventors of the Golden Age," CEPR Discussion Papers 11755, C.E.P.R. Discussion Papers.
    5. repec:eee:tefoso:v:127:y:2018:i:c:p:38-56 is not listed on IDEAS

    More about this item

    Keywords

    Social and Behavioral Sciences; patents; wages; incentives; inventors; perfomances pay; return;

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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