Thursday, April 26, 2018 - 3:30pm to 6:20pm
In this seminar, Philippe Aghion reports recent research on Finnish inventors, analyzing the social origins of inventors and the returns to invention based on three data sets: individual income data, patenting data, and IQ data. Part one, "The Social Origins and IQ of Inventors" analyzes the determinants of an individual's probability of inventing. Aghion et al. find that: (i) parental income affects the probability of inventing, yet the estimated impact of parental income is greatly diminished once parental education and the individual's IQ are controlled for; (ii) IQ has both a direct effect on the probability of inventing an indirect impact through education; the effect of IQ is larger for inventors than for medical doctors or lawyers; and the impact of IQ is robust to controlling for unobserved family characteristics by focusing on potential inventors with brothers close in age; (iii) social family interactions also matter, as shown by looking at biological versus non-biological parents; (iv) there is a positive and significant interaction effect between IQ and father income. Part two, "On the Returns to Invention within Firms" analyzes the returns to invention within firms, finding that inventors collect only 8% of the total private returns from invention whereas entrepreneurs get over 44% of the total gains from invention.