Innovation and Top Income Inequality

By Philippe Aghion, Ufuk Akcigit, Antonin Bergeaud, Richard Blundell, David Hémous. The Review of Economic Studies, 2018

545 citations recorded by the source corpus.

In this article, we use cross-state panel and cross-U.S. commuting-zone data to look at the relationship between innovation, top income inequality and social mobility. We find positive correlations between measures of innovation and top income inequality. We also show that the correlations between innovation and broad measures of inequality are not significant. Next, using instrumental variable analysis, we argue that these correlations at least partly reflect a causality from innovation to top income shares. Finally, we show that innovation, particularly by new entrants, is positively associated with social mobility, but less so in local areas with more intense lobbying activities.

Subfields: Economics and Econometrics, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/ed4ae1dc91769e30826cc7674707e0f249115ef8

Citations in the corpus

• The Rise of American Ingenuity: Innovation and Inventors of the Golden Age (2017, unknown): “…role of cities, the distribution of talent, and the relationship between inequality, social mobility, innovation and growth (e.g., Klette and Kortum (2004), Akcigit and Kerr (2016), Acemoglu et al. (2015), Hsieh and Moretti (2015), Hsieh et al. (2013), Jones and Kim (2014), Aghion et al. (2015a)).”
• A Schumpeterian Model of Top Income Inequality (2014, unknown): “Aghion et al. (2015) show that innovation and top income inequality are positively correlated withinUS states and across US commuting zones; we”