Innovation and spatial inequality in Europe and USA

Rodríguez-Pose, Andrés and Neil Lee
Authors registered in the RePEc Author Service: Andrés Rodríguez-Pose

No 9139, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Innovation is a crucial driver of urban and regional economic success. Innovative cities and regions tend to grow faster and have higher average wages. Little research, however, has considered the potential negative consequences: as a small body of innovators gain relative to others, innovation may lead to inequality. The evidence on this point is fragmented, based on cross-sectional evidence on skill premia rather than overall levels of inequality. This paper provides the first comparative evidence on the link between innovation and inequality in a continental perspective. Using micro data from population surveys for European regions and US Cities, the paper finds, after controlling for other potential factors, good evidence of a link between innovation and inequality in European regions, but only limited evidence of such a relationship in the United States. Less flexible labour markets and lower levels of migration seem to be at the root of the stronger association between innovation and income inequality in Europe than in the US.

Keywords: Cities; European union; Inequality; Innovation; Regions; United states (search for similar items in EconPapers)
JEL-codes: D31 O31 R13 (search for similar items in EconPapers)
Date: 2012-09
New Economics Papers: this item is included in nep-cse, nep-eur, nep-geo, nep-ino, nep-knm and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Journal Article: Innovation and spatial inequality in Europe and USA (2013)
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