Working Paper: NBER ID: w30964
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: Parental Education; Invention; Innovation; Causal Effects; Finland
JEL Codes: J24; O3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Parental income (D31) | Offspring inventing (O31) |
| Comprehensive schooling reform in the early 1970s in Finland (I28) | Causal influence of parental education on offspring inventing (I24) |
| Parental education (I24) | Offspring inventing (O31) |
| Distance to the nearest university (I23) | Parental education (I24) |
| Parental education (I24) | Offspring inventing (sons) (O39) |
| Parental education (I24) | Offspring inventing (daughters) (O39) |