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Are innovative regions more unequal? Evidence from Europe

Lee, Neil (2011) Are innovative regions more unequal? Evidence from Europe. Environment and Planning C: Government and Policy, 29 (1). pp. 2-23. ISSN 0263-774X

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Abstract

Studies of the United States have suggested that the most innovative areas are also the most unequal. There are a number of potential processes that might lead to this. Innovation may raise the return of human capital in ways which can lead to localised inequality. Innovative industries may be subject to greater wage polarisation or offer more erratic returns than other industries. Moreover, the affluent may hire others to work in poorly paid personal service employment nearby. However, while there is some evidence for these processes in the US, whether this applies in the European case is less certain. I use the European Community Household Panel and the Eurostat Regio database to test the link between innovation and wage inequality in a panel of European regions for the period 1996 – 2001. Two measures of innovation are used: employment in knowledge-based industries and the level of patenting in a region. The results are indicative of a positive link between regional innovation, as measured by patenting, and inequality. In contrast, there is little evidence of a link between knowledge-based industries and inequality, with the exception of a positive relationship between employment in knowledge-intensive financial services and inequality.

Item Type: Article
Additional Information: © 2011 Pion Ltd
Library of Congress subject classification: H Social Sciences > HB Economic Theory
H Social Sciences > HC Economic History and Conditions
H Social Sciences > HN Social history and conditions. Social problems. Social reform
Sets: Departments > Geography and Environment
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 10 Sep 2013 15:53
URL: http://eprints.lse.ac.uk/52368/

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