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Innovation and spatial inequality in Europe and USA

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  • Lee, Neil
  • Rodriguez-Pose, Andres

Abstract

Innovation is a crucial driver of urban and regional economic success. Innovative cities and regions tend to grow faster and have higher average wages. Little research, however, has considered the potential negative consequences: as a small body of innovators gain relative to others, innovation may lead to inequality. The evidence on this point is fragmented, based on cross-sectional evidence on skill premia rather than overall levels of inequality. This paper provides the first comparative evidence on the link between innovation and inequality in a continental perspective. Using micro data from population surveys for European regions and US Cities, the paper finds, after controlling for other potential factors, good evidence of a link between innovation and inequality in European regions, but only limited evidence of such a relationship in the United States. Less flexible labour markets and lower levels of migration seem to be at the root of the stronger association between innovation and income inequality in Europe than in the US.

Suggested Citation

  • Lee, Neil & Rodriguez-Pose, Andres, 2012. "Innovation and spatial inequality in Europe and USA," CEPR Discussion Papers 9139, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:9139
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    Cited by:

    1. Di Cataldo, Marco & Rodríguez-Pose, Andrés, 2016. "What drives employment growth and social inclusion in EU regions," LSE Research Online Documents on Economics 68510, London School of Economics and Political Science, LSE Library.
    2. Mario Reinhold, 2016. "On the Link between Job Polarisation and Wage Inequality - A regional approach for Germany," ERSA conference papers ersa16p361, European Regional Science Association.
    3. repec:wfo:wstudy:58501 is not listed on IDEAS
    4. Neil Lee & Stephen Clarke, 2017. "Who gains from high-tech growth? High-technology multipliers, employment and wages in Britain," SPRU Working Paper Series 2017-14, SPRU - Science and Technology Policy Research, University of Sussex.
    5. Neil Lee & Andrés Rodríguez-Pose, 2016. "Is there trickle-down from tech? Poverty, employment and the high-technology multiplier in US cities," Papers in Evolutionary Economic Geography (PEEG) 1618, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Aug 2016.
    6. Coccia M., 2014. "Temperate climate - Innovative outputs nexus," MERIT Working Papers 088, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    7. Karl Aiginger & Matthias Firgo, 2017. "Regional competitiveness: connecting an old concept with new goals," Chapters,in: Handbook of Regions and Competitiveness, chapter 7, pages 155-191 Edward Elgar Publishing.
    8. Neil Lee & Paul Sissons, 2016. "Inclusive growth? The relationship between economic growth and poverty in British cities," Environment and Planning A, , vol. 48(11), pages 2317-2339, November.
    9. Reinhold, Mario, 2016. "On the Link between Job Polarisation and Wage Inequality in Germany," Annual Conference 2016 (Augsburg): Demographic Change 145802, Verein für Socialpolitik / German Economic Association.
    10. Argentino Pessoa, 2014. "Smart Specialisation in the EU: Is it a Bridge between Innovation and Cohesion?," ERSA conference papers ersa14p989, European Regional Science Association.
    11. Sébastien Breau & Dieter F. Kogler & Kenyon C. Bolton, 2014. "On the Relationship between Innovation and Wage Inequality: New Evidence from Canadian Cities," Economic Geography, Clark University, vol. 90(4), pages 351-373, October.
    12. repec:taf:regstd:v:50:y:2016:i:10:p:1714-1727 is not listed on IDEAS
    13. Neil Lee & Paul Sissons & Katy Jones, 2016. "The Geography of Wage Inequality in British Cities," Regional Studies, Taylor & Francis Journals, vol. 50(10), pages 1714-1727, October.
    14. Emma Howard & Carol Newman & Finn Tarp, 2016. "Measuring industry coagglomeration and identifying the driving forces," Journal of Economic Geography, Oxford University Press, vol. 16(5), pages 1055-1078.
    15. Ermelinda Lopes & Ermelinda Lopes Silva, 2016. "Tieboutian market Structure and Collective Decision Process Within a Global Competition Policy," EcoMod2016 9292, EcoMod.
    16. Argentino Pessoa, 2016. "Rectracted: Smart specialization in the EU: RIS3 conditionality, innovation and cohesion," Papers in Regional Science, Wiley Blackwell, vol. 95(2), pages 439-439, June.
    17. Christian Ketels, 2015. "Competitiveness and Clusters: Implications for a New European Growth Strategy," WWWforEurope Working Papers series 84, WWWforEurope.
    18. Gheorghe Zaman & Zizi Goschin, 2014. "Economic Crisis and Wage Divergence: Empirical Evidence from Romania," Prague Economic Papers, University of Economics, Prague, vol. 2014(4), pages 493-513.

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    Keywords

    Cities; European Union; Inequality; Innovation; Regions; United States;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

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