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Labor Force Demographics and Corporate Innovation

Author

Listed:
  • Derrien, François
  • Kecskes, Ambrus
  • Nguyen, Phuong-Anh

Abstract

Firms in younger labor markets produce more innovation. We establish this using the local labor force projected based on historical births in each local labor market in the United States. Three successive levels of analysis – labor markets, firms, and inventors – allow us to separate out effects such as firm and inventor life cycles. We also find that corporate innovation activities reflect the innovative characteristics of younger labor forces, and firms in younger labor markets have higher valuations. Our results indicate that younger people as a group – inventors interacting with non-inventors – produce more innovation for firms through the labor supply channel rather than through a financing supply or consumer demand channel.

Suggested Citation

  • Derrien, François & Kecskes, Ambrus & Nguyen, Phuong-Anh, 2018. "Labor Force Demographics and Corporate Innovation," HEC Research Papers Series 1243, HEC Paris.
    • Handle: RePEc:ebg:heccah:1243
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    Citations

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    Cited by:

    1. Basso, Henrique S. & Jimeno, Juan F., 2021. "From secular stagnation to robocalypse? Implications of demographic and technological changes," Journal of Monetary Economics, Elsevier, vol. 117(C), pages 833-847.
    2. Park, Cyn-Young & Shin, Kwanho & Kikkawa, Aiko, 2022. "Demographic change, technological advance, and growth: A cross-country analysis," Economic Modelling, Elsevier, vol. 108(C).
    3. Balázs Zélity, 2023. "Age diversity and aggregate productivity," Journal of Population Economics, Springer;European Society for Population Economics, vol. 36(3), pages 1863-1899, July.
    4. Ashira Menashe-Oren, 2020. "Migrant-based youth bulges and social conflict in urban sub-Saharan Africa," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 42(3), pages 57-98.

    More about this item

    Keywords

    Innovation; Demographics; Age structure; Labor markets; Firms; Inventors; Patents;
    All these keywords.

    JEL classification:

    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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