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Who Becomes an Inventor in America? The Importance of Exposure to Innovation

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  • Bell, Alex
  • Chetty, Raj
  • Jaravel, Xavier
  • Petkova, Neviana
  • Van Reenen, John

Abstract

We characterize the factors that determine who becomes an inventor in America by using de-identified data on 1.2 million inventors from patent records linked to tax records. We establish three sets of results. First, children from high-income (top 1%) families are ten times as likely to become inventors as those from below-median income families. There are similarly large gaps by race and gender. Differences in innate ability, as measured by test scores in early childhood, explain relatively little of these gaps. Second, exposure to innovation during childhood has significant causal effects on children's propensities to become inventors. Growing up in a neighborhood or family with a high innovation rate in a specific technology class leads to a higher probability of patenting in exactly the same technology class. These exposure effects are gender-specific: girls are more likely to become inventors in a particular technology class if they grow up in an area with more female inventors in that technology class. Third, the financial returns to inventions are extremely skewed and highly correlated with their scientific impact, as measured by citations. Consistent with the importance of exposure effects and contrary to standard models of career selection, women and disadvantaged youth are as under-represented among high-impact inventors as they are among inventors as a whole. We develop a simple model of inventors' careers that matches these empirical results. The model implies that increasing exposure to innovation in childhood may have larger impacts on innovation than increasing the financial incentives to innovate, for instance by reducing tax rates. In particular, there are many "lost Einsteins" - individuals who would have had highly impactful inventions had they been exposed to innovation.

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  • Bell, Alex & Chetty, Raj & Jaravel, Xavier & Petkova, Neviana & Van Reenen, John, 2017. "Who Becomes an Inventor in America? The Importance of Exposure to Innovation," CEPR Discussion Papers 12544, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:12544
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    Cited by:

    1. Bell, Brian & Bukowski, Pawel & Machin, Stephen, 2018. "Rent Sharing and Inclusive Growth," CEPR Discussion Papers 13408, C.E.P.R. Discussion Papers.
    2. Rachid Laajaj & Andres Moya & Fabio Sánchez, 2018. "Equality of Opportunity and Human Capital Accumulation: Motivational Effect of a Nationwide Scholarship in Colombia," Documentos CEDE 016352, Universidad de los Andes - CEDE.
    3. repec:nbr:nberch:14102 is not listed on IDEAS
    4. Michel Raitano & Francesco Vona, 2018. "Nepotism vs specific skills: the effect of professional liberalization on returns to parental back ground of Italian lawyers," Documents de Travail de l'OFCE 2018-36, Observatoire Francais des Conjonctures Economiques (OFCE).
    5. repec:spr:scient:v:118:y:2019:i:3:d:10.1007_s11192-018-2979-0 is not listed on IDEAS
    6. repec:iza:izawol:journl:2018:n:130 is not listed on IDEAS
    7. Alex 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," CEP Discussion Papers dp1597, Centre for Economic Performance, LSE.
    8. repec:kap:pubcho:v:181:y:2019:i:1:d:10.1007_s11127-019-00645-z is not listed on IDEAS
    9. Hvide, Hans K. & Oyer, Paul, 2017. "Dinner Table Human Capital and Entrepreneurship," Research Papers repec:ecl:stabus:3658, Stanford University, Graduate School of Business.
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    11. Lucia Foster & Cheryl Grim & John Haltiwanger & Zoltan Wolf, 2018. "Innovation, Productivity Dispersion, and Productivity Growth," NBER Chapters,in: Measuring and Accounting for Innovation in the 21st Century National Bureau of Economic Research, Inc.
    12. repec:iab:iabfda:201803_en is not listed on IDEAS
    13. Yiqun Chen & Petra Persson & Maria Polyakova, 2019. "The Roots of Health Inequality and The Value of Intra-Family Expertise," NBER Working Papers 25618, National Bureau of Economic Research, Inc.
    14. John V. Winters, 2018. "Do higher levels of education and skills in an area benefit wider society?," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-10, December.
    15. Zhu, J., 2018. "The agricultural root of innovation in China," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277219, International Association of Agricultural Economists.
    16. Del Carpio, Lucia & Guadalupe, Maria, 2018. "More Women in Tech? Evidence from a field experiment addressing social identity," CEPR Discussion Papers 13234, C.E.P.R. Discussion Papers.
    17. Del Carpio, Lucía & Guadalupe, Maria, 2018. "More Women in Tech? Evidence from a Field Experiment Addressing Social Identity," IZA Discussion Papers 11876, Institute of Labor Economics (IZA).
    18. Ufuk Akcigit & John Grigsby & Tom Nicholas & Stefanie Stantcheva, 2018. "Taxation and Innovation in the 20th Century," NBER Working Papers 24982, National Bureau of Economic Research, Inc.
    19. Baghai, Ramin P. & Silva, Rui C & Ye, Luofu, 2018. "Teams and Bankruptcy," CEPR Discussion Papers 13198, C.E.P.R. Discussion Papers.

    More about this item

    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • H0 - Public Economics - - General
    • J0 - Labor and Demographic Economics - - General
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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