Social Push and the Direction of Innovation

Elias Einiö, Josh Feng and Xavier Jaravel

No 160, Working Papers from VATT Institute for Economic Research

Abstract: What are the implications of unequal access to innovation careers for the direction of innovation and inequality? Leveraging novel linked datasets in the United States and Finland, we document that innovators create products more likely to be purchased by consumers like them in terms of gender, socioeconomic status, and age. We find that a key explanatory channel is that social exposure causes a shift in the direction of innovation, independent of financial incentives. Incorporating this "social push" channel into a growth model, we estimate that unequal access to innovation careers has a large effect on cost-of-living inequality and long-run growth.

Keywords: innovation; inequality; growth; innovators' socioeconomic background; Social security; taxation and inequality; Business taxation and regulation; O31; O41; D71; fi=Elinkeinopolitiikka|sv=Näringspolitik|en=Industrial and economic policy|; fi=Tulonjako ja eriarvoisuus|sv=Inkomstfördelning och ojämlikhet|en=Income distribution and inequality| (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-hme, nep-ino, nep-sbm, nep-tid and nep-ure
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