Working Paper: CEPR ID: DP17905
Authors: Philippe Aghion; Ufuk Akcigit; Ari Hyytinen; Otto Toivanen
Abstract: Why is invention strongly positively correlated with parental income not only in the US but also in Finland which displays low income inequality and high social mobility? Using data on 1.45M Finnish individuals and their parents, we find that: (i) the positive association between parental income and off-spring probability of inventing is greatly reduced when controlling for parental education; (ii) instrumenting for the parents having a MSc-degree using distance to nearest university reveals a large causal effect of parental education on offspring probability of inventing; and (iii) the causal effect of parental education has been markedly weakened by the introduction in the early 1970s of a comprehensive schooling reform.
Keywords: education; inventors; innovation; patents; parents education
JEL Codes: O3; O38; I25; I26
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Parental income (D31) | Probability of offspring becoming inventors (L26) |
| Comprehensive schooling reform in the early 1970s (I28) | Causal effect of parental education on offspring inventing (J24) |
| Establishment of new universities (I23) | Parental and offspring human capital (J24) |
| Parental education (I24) | Probability of offspring becoming inventors (L26) |
| Distance to the nearest university (I23) | Parental education (I24) |
| Parental education (I24) | Probability of offspring becoming inventors (sons) (J19) |
| Parental education (I24) | Probability of offspring becoming inventors (daughters) (J19) |