A Year Older, A Year Wiser (and Farther from Frontier): Invention Rents and Human Capital Depreciation

Philippe Aghion (), Ufuk Akcigit, Ari Hyytinen and Otto Toivanen
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Philippe Aghion: LSE - London School of Economics and Political Science, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CdF (institution) - Collège de France, INSEAD - Institut Européen d'administration des Affaires
Ufuk Akcigit: University of Chicago
Ari Hyytinen: Hanken School of Economics - Hanken School of Economics, Helsinki Graduate School of Economics
Otto Toivanen: Aalto University, School of Business and School of Science, Helsinki Graduate School of Economics

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Abstract: We look at how the arrival of an invention affects wage returns and the probability of moving out of employment for white- and blue-collar co-workers of the inventor. First results suggest that older workers are hurt by the arrival of an invention. This negative effect disappears when we control for education and, in particular, for the time since obtaining the last formal degree, that is, distance to human capital frontier. If anything, this effect is slightly higher for non-STEM than STEM-educated co-workers. This result suggests that retraining programs could be helpful in making the process of creative destruction and economic growth more inclusive.

Date: 2024-07
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Published in Review of Economics and Statistics, 2024, 106 (4), pp.974-982. ⟨10.1162/rest_a_01262⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-04798468

DOI: 10.1162/rest_a_01262

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