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Where Have All the "Creative Talents" Gone? Employment Dynamics of U.S. Inventors

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Where Have All the "Creative Talents" Gone? Employment Dynamics of U.S. Inventors

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Working Paper Number CES-23-17

Abstract

CES_working_paper_series
Download Where Have All the "Creative Talents" Gone? Employment Dynamics of U.S. Inventors [PDF - > 1MB]

How are inventors allocated in the U.S. economy and does that allocation affect innovative capacity? To answer these questions, we first build a model where an inventor with a new idea has the possibility to work for an entrant or incumbent firm. Strategic considerations encourage the incumbent to hire the inventor, offering higher wages, and then not implement her idea. We then combine data on 760 thousand U.S. inventors with the LEHD data. We find that when an inventor is hired by an incumbent, their earnings increases by 12.6 percent and their innovative output declines by 6 to 11 percent.

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Page Last Revised - April 20, 2023
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