IDEAS home Printed from https://ideas.repec.org/p/cen/wpaper/23-17.html
   My bibliography  Save this paper

Where Have All the "Creative Talents" Gone? Employment Dynamics of US Inventors

Author

Listed:
  • Ufuk Akcigit
  • Nathan Goldschlag

Abstract

How are inventors allocated in the US economy and does that allocation affect innovative capacity? To answer these questions, we first build a model where an inventor with a new idea has the possibility to work for an entrant or incumbent firm. Strategic considerations encourage the incumbent to hire the inventor, offering higher wages, and then not implement her idea. We then combine data on 760 thousand U.S. inventors with the LEHD data. We find that when an inventor is hired by an incumbent, their earnings increases by 12.6 percent and their innovative output declines by 6 to 11 percent.

Suggested Citation

  • Ufuk Akcigit & Nathan Goldschlag, 2023. "Where Have All the "Creative Talents" Gone? Employment Dynamics of US Inventors," Working Papers 23-17, Center for Economic Studies, U.S. Census Bureau.
  • Handle: RePEc:cen:wpaper:23-17
    as

    Download full text from publisher

    File URL: https://www2.census.gov/library/working-papers/2023/adrm/ces/CES-WP-23-17.pdf
    File Function: First version, 2023
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Brent Neiman, 2014. "The Global Decline of the Labor Share," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(1), pages 61-103.
    2. Akcigit, Ufuk & Pearce, Jeremy & Prato, Marta, 2020. "Tapping into Talent: Coupling Education and Innovation Policies for Economic Growth," CEPR Discussion Papers 15318, C.E.P.R. Discussion Papers.
    3. Gene M. Grossman & Elhanan Helpman, 1991. "Quality Ladders in the Theory of Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(1), pages 43-61.
    4. Ufuk Akcigit & Salomé Baslandze & Francesca Lotti, 2023. "Connecting to Power: Political Connections, Innovation, and Firm Dynamics," Econometrica, Econometric Society, vol. 91(2), pages 529-564, March.
    5. Lucia Foster & John C. Haltiwanger & C. J. Krizan, 2001. "Aggregate Productivity Growth: Lessons from Microeconomic Evidence," NBER Chapters, in: New Developments in Productivity Analysis, pages 303-372, National Bureau of Economic Research, Inc.
    6. Chang-Tai Hsieh & Peter J. Klenow, 2009. "Misallocation and Manufacturing TFP in China and India," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(4), pages 1403-1448.
    7. Ufuk Akcigit & William R. Kerr, 2018. "Growth through Heterogeneous Innovations," Journal of Political Economy, University of Chicago Press, vol. 126(4), pages 1374-1443.
    8. 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..
    9. Hopenhayn, Hugo & Rogerson, Richard, 1993. "Job Turnover and Policy Evaluation: A General Equilibrium Analysis," Journal of Political Economy, University of Chicago Press, vol. 101(5), pages 915-938, October.
    10. John Haltiwanger & Henry Hyatt & Erika McEntarfer & Liliana Sousa & Stephen Tibbets, 2014. "Firm Age And Size In The Longitudinal Employer-Household Dynamics Data," Working Papers 14-16, Center for Economic Studies, U.S. Census Bureau.
    11. Tor Jakob Klette & Samuel Kortum, 2004. "Innovating Firms and Aggregate Innovation," Journal of Political Economy, University of Chicago Press, vol. 112(5), pages 986-1018, October.
    12. David Argente & Salomé Baslandze & Douglas Hanley & Sara Moreira, 2020. "Patents to Products: Product Innovation and Firm Dynamics," FRB Atlanta Working Paper 2020-4, Federal Reserve Bank of Atlanta.
    13. Ufuk Akcigit, 2017. "Economic Growth: The Past, the Present, and the Future," Journal of Political Economy, University of Chicago Press, vol. 125(6), pages 1736-1747.
    14. Oliver E. Williamson, 1986. "The Incentive Limits of Firms: A Comparative Institutional Assessment of Bureaucracy," International Economic Association Series, in: Bela Balassa & Herbert Giersch (ed.), Economic Incentives, chapter 7, pages 204-237, Palgrave Macmillan.
    15. Chang‐Tai Hsieh & Erik Hurst & Charles I. Jones & Peter J. Klenow, 2019. "The Allocation of Talent and U.S. Economic Growth," Econometrica, Econometric Society, vol. 87(5), pages 1439-1474, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kox, Henk L.M., 2023. "Testing an extended knowledge-capital model of foreign direct investment," MPRA Paper 117266, University Library of Munich, Germany.
    2. Ufuk Akcigit & Raman Chhina & Seyit Cilasun & Javier Miranda & Eren Ocakverdi & Nicolas Serrano-Velarde, 2023. "Intuit QuickBooks Small Business Index: A New Employment Series for the US, Canada, and the UK," Jena Economics Research Papers 2023-005, Friedrich-Schiller-University Jena.
    3. Bräuer, Richard, 2023. "The aggregate effects of the decline of disruptive innovation," IWH Discussion Papers 22/2023, Halle Institute for Economic Research (IWH).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ufuk Akcigit & Salomé Baslandze & Francesca Lotti, 2023. "Connecting to Power: Political Connections, Innovation, and Firm Dynamics," Econometrica, Econometric Society, vol. 91(2), pages 529-564, March.
    2. Aghion, Philippe & Akcigit, Ufuk & Howitt, Peter, 2014. "What Do We Learn From Schumpeterian Growth Theory?," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 0, pages 515-563, Elsevier.
    3. Daron Acemoglu & Ufuk Akcigit & Harun Alp & Nicholas Bloom & William Kerr, 2018. "Innovation, Reallocation, and Growth," American Economic Review, American Economic Association, vol. 108(11), pages 3450-3491, November.
    4. Marcin Bielecki, 2022. "Innovation and Endogenous Growth over the Business Cycle with Frictional Labor Markets," Central European Journal of Economic Modelling and Econometrics, Central European Journal of Economic Modelling and Econometrics, vol. 14(3), pages 263-302, September.
    5. Jess Benhabib & Jesse Perla & Christopher Tonetti, 2021. "Reconciling Models of Diffusion and Innovation: A Theory of the Productivity Distribution and Technology Frontier," Econometrica, Econometric Society, vol. 89(5), pages 2261-2301, September.
    6. Acemoglu, Daron & Cao, Dan, 2015. "Innovation by entrants and incumbents," Journal of Economic Theory, Elsevier, vol. 157(C), pages 255-294.
    7. Michael Peters & Ufuk Akcigit, 2014. "Lack of Selection and Poor Management Practices: Firm Dynamics in Developing Countries," 2014 Meeting Papers 762, Society for Economic Dynamics.
    8. Michael Peters, 2020. "Heterogeneous Markups, Growth, and Endogenous Misallocation," Econometrica, Econometric Society, vol. 88(5), pages 2037-2073, September.
    9. Douglas Hanley, 2014. "Innovation, Technological Interdependence, and Economic Growth," Working Paper 533, Department of Economics, University of Pittsburgh, revised Jan 2014.
    10. Ufuk Akcigit & Stefanie Stantcheva, 2020. "Taxation and Innovation: What Do We Know?," NBER Chapters, in: Innovation and Public Policy, pages 189-212, National Bureau of Economic Research, Inc.
    11. Argente, David & Lee, Munseob & Moreira, Sara, 2018. "Innovation and product reallocation in the great recession," Journal of Monetary Economics, Elsevier, vol. 93(C), pages 1-20.
    12. Philippe Aghion & Ufuk Akcigit & Antonin Bergeaud & Richard Blundell & David Hemous, 2019. "Innovation and Top Income Inequality," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 86(1), pages 1-45.
    13. Tetsushi Murao, 2017. "Aggregate Productivity Growth Decomposition: an Overview," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 13(3), pages 269-286, November.
    14. Daniel Garcia‐Macia & Chang‐Tai Hsieh & Peter J. Klenow, 2019. "How Destructive Is Innovation?," Econometrica, Econometric Society, vol. 87(5), pages 1507-1541, September.
    15. John Haltiwanger & Henry Hyatt & Erika McEntarfer, 2018. "Who Moves Up the Job Ladder?," Journal of Labor Economics, University of Chicago Press, vol. 36(S1), pages 301-336.
    16. GABLER, Alain & POSCHKE, Markus, 2011. "Growth through Experimentation," Cahiers de recherche 11-2011, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
    17. Roman Fossati, 2011. "Outsourcing versus Vertical Integration: A Dynamic Model of Industry Equilibrium," 2011 Meeting Papers 1421, Society for Economic Dynamics.
    18. Salomé Baslandze, 2022. "Entrepreneurship through Employee Mobility, Innovation, and Growth," FRB Atlanta Working Paper 2022-10, Federal Reserve Bank of Atlanta.
    19. Young Eun Kim & Norman V. Loayza, 2019. "Productivity Growth: Patterns and Determinants across the World," Revista Economía, Fondo Editorial - Pontificia Universidad Católica del Perú, vol. 42(84), pages 36-93.
    20. Marcin Bielecki, 2022. "Long Shadows of Financial Shocks: An Endogenous Growth Perspective," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 3, pages 1-23.

    More about this item

    Keywords

    Inventors; innovation; R&D; firms; dynamism; reallocation;
    All these keywords.

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cen:wpaper:23-17. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dawn Anderson (email available below). General contact details of provider: https://edirc.repec.org/data/cesgvus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.