Innovation and Top Income Inequality

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 i...

Full description

Saved in:
Bibliographic Details
Published inThe Review of economic studies Vol. 86; no. 1 (306); pp. 1 - 45
Main Authors AGHION, PHILIPPE, AKCIGIT, UFUK, BERGEAUD, ANTONIN, BLUNDELL, RICHARD, HEMOUS, DAVID
Format Journal Article
LanguageEnglish
Published Oxford University Press 01.01.2019
Oxford University Press (OUP)
Subjects
Economics and Finance
Humanities and Social Sciences
D63
Top Income
O40
O31
J14
O30
O33
Incumbents
O43
J15
O34
Innovation
O47
Social Mobility
Entrant
Citations
Inequality
Patenting
Online AccessGet full text

Cover

More Information
Summary: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.
ISSN:0034-6527
1467-937X
DOI:10.1093/restud/rdy027