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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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    Cited by:

    1. Dorner, Matthias & Fryges, Helmut & Schopen, Kathrin, 2017. "Wages in high-tech start-ups – Do academic spin-offs pay a wage premium?," Research Policy, Elsevier, vol. 46(1), pages 1-18.
    2. Xavier Jaravel & Neviana Petkova & Alex Bell, 2018. "Team-Specific Capital and Innovation," American Economic Review, American Economic Association, vol. 108(4-5), pages 1034-1073, April.
    3. Alexander M. Bell & Raj Chetty & Xavier Jaravel & Neviana Petkova & John Van Reenen, 2019. "Do Tax Cuts Produce More Einsteins? The Impacts of Financial Incentives vs. Exposure to Innovation on the Supply of Inventors," NBER Working Papers 25493, National Bureau of Economic Research, Inc.
    4. Ufuk Akcigit & John Grigsby & Tom Nicholas, 2017. "The Rise of American Ingenuity: Innovation and Inventors of the Golden Age," Working Papers 2017-6, Princeton University. Economics Department..
    5. repec:iab:iabfda:201803(en is not listed on IDEAS
    6. Patrick Kline & Neviana Petkova & Heidi Williams & Owen Zidar, 2019. "Who Profits from Patents? Rent-Sharing at Innovative Firms," The Quarterly Journal of Economics, Oxford University Press, vol. 134(3), pages 1343-1404.
    7. Dorner, Matthias & Harhoff, Dietmar & Gaessler, Fabian & Hoisl, Karin & Poege, Felix, 2019. "Linked Inventor Biography Data 1980-2014 : (INV-BIO ADIAB 8014)," FDZ Datenreport. Documentation on Labour Market Data 201803_en, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    8. 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).
    9. Benos, Nikos & Tsiachtsiras, Georgios, 2018. "Innovation and Inequality: World Evidence," MPRA Paper 89217, University Library of Munich, Germany.
    10. d’Andria, D. & Savin, I., 2018. "A Win-Win-Win? Motivating innovation in a knowledge economy with tax incentives," Technological Forecasting and Social Change, Elsevier, vol. 127(C), pages 38-56.

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    Keywords

    Social and Behavioral Sciences; patents; wages; incentives; inventors; perfomances pay; return;
    All these keywords.

    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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