Working Paper: CEPR ID: DP12544
Authors: Alex Bell; Raj Chetty; Xavier Jaravel; Neviana Petkova; John Van Reenen
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 ahigher 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.
Keywords: No keywords provided
JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Exposure to innovation during childhood (O36) | Children's likelihood of becoming inventors (O31) |
| Growing up in a neighborhood with high innovation rate (O35) | Higher probability of patenting in that technology class (O38) |
| Children's patenting behavior (O34) | Parents' patenting behavior (J12) |
| Moving a child from a lower innovation area to a higher innovation area (J62) | Increased likelihood of becoming an inventor (O31) |
| High-income families (I24) | Likelihood of becoming inventors (O31) |
| Exposure to innovation during childhood (O36) | Innovation rates among children from disadvantaged backgrounds (O35) |
| Growing up in areas with more female inventors (O39) | Likelihood of becoming an inventor (specifically for girls) (O31) |