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Innovation and top income inequality

Aghion, Philippe, Akcigit, Ufuk, Bergeaud, Antonin, Blundell, Richard and Hemous, David (2019) Innovation and top income inequality. Review of Economic Studies, 86 (1). pp. 1-45. ISSN 0034-6527

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Identification Number: 10.1093/restud/rdy027

Abstract

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.

Item Type: Article
Additional Information: © 2018 The Authors
Divisions: Economics
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HN Social history and conditions. Social problems. Social reform
JEL classification: O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O30 - General
O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O31 - Innovation and Invention: Processes and Incentives
O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O33 - Technological Change: Choices and Consequences; Diffusion Processes
O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O34 - Intellectual Property Rights: National and International Issues
O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O40 - General
O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O47 - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output (Income) Convergence
D - Microeconomics > D6 - Welfare Economics > D63 - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
J - Labor and Demographic Economics > J1 - Demographic Economics > J14 - Economics of the Elderly; Economics of the Handicapped
J - Labor and Demographic Economics > J1 - Demographic Economics > J15 - Economics of Minorities and Races; Non-labor Discrimination
Date Deposited: 26 Mar 2019 12:42
Last Modified: 11 Jul 2019 23:10
URI: http://eprints.lse.ac.uk/id/eprint/100356

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