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Social Push and the Direction of Innovation

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  • Einiö, Elias
  • Feng, Josh
  • Jaravel, Xavier

Abstract

What are the implications of unequal access to innovation careers for the direction of innovation and inequality? Leveraging novel linked datasets in the United States and Finland, we document that innovators create products more likely to be purchased by consumers like them in terms of gender, socioeconomic status, and age. We find that a key explanatory channel is that social exposure causes a shift in the direction of innovation, independent of financial incentives. Incorporating this "social push" channel into a growth model, we estimate that unequal access to innovation careers has a large effect on cost-of-living inequality and long-run growth.

Suggested Citation

  • Einiö, Elias & Feng, Josh & Jaravel, Xavier, 2023. "Social Push and the Direction of Innovation," Working Papers 160, VATT Institute for Economic Research.
    • Handle: RePEc:fer:wpaper:160
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    File URL: https://www.doria.fi/handle/10024/188220
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    More about this item

    Keywords

    innovation; inequality; growth; innovators' socioeconomic background; Social security; taxation and inequality; Business taxation and regulation; O31; O41; D71; fi=Elinkeinopolitiikka|sv=Näringspolitik|en=Industrial and economic policy|; fi=Tulonjako ja eriarvoisuus|sv=Inkomstfördelning och ojämlikhet|en=Income distribution and inequality|;
    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
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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