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Abstract:

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CEP Discussion Paper
The Social Origins of Inventors
Philippe Aghion, Ufuk Akcigit, Ari Hyytinen and Otto Toivanen
December 2017
Paper No' CEPDP1522:
Full Paper (pdf)

JEL Classification: O31; I24; J18


Tags: inventors; innovation; social mobility; iq; education; parental background

In this paper, we merge three datasets - individual income data, patenting data, and IQ data - to analyze the deterninants of an individual’s probability of inventing. We find that: (i) parental income matters even after controlling for other background variables and for IQ, yet the estimated impact of parental income is greatly diminished once parental education and the individual’s IQ are controlled for; (ii) IQ has both a direct effect on the probability of inventing an indirect impact through education. The effect of IQ is larger for inventors than for medical doctors or lawyers. The impact of IQ is robust to controlling for unobserved family characteristics by focusing on potential inventors with brothers close in age. We also provide evidence on the importance of social family interactions, by looking at biological versus non-biological parents. Finally, we find a positive and significant interaction effect between IQ and father income, which suggests a misallocation of talents to innovation.

This paper has been published as:
'On the Returns to Invention within Firms: Evidence from Finland', Philippe Aghion, Ufuk Akcigit, Ari Hyytinen and Otto Toivanen, AEA Papers and Proceedings, Volume 108, May 2018