Innovation and Inequality: The Role of Firms
Saturday, Jan. 5, 2019 2:30 PM - 4:30 PM
- Chair: Nicholas Bloom, Stanford University
Skill-Biased Innovation Activities: Evidence from Hungarian Firms
AbstractThis paper investigates the consequences of innovation activities. We exploit a unique firm-level survey linked to employee data from Hungary that allows us to examine broadly defined innovation activities including the introduction of new products, process innovation and organizational innovation. We show that these innovation activities are skill-biased insofar as they lead to an increase both in the share of college educated workers and in their wage premium. The skill bias is not solely driven by high-novelty, R&D-based innovation, but also, to a comparable extent, by the low-novelty kind. Among low-novelty innovation types, product and process innovation are the most skill-biased, while organizational innovation is less so. These results highlight that low-novelty innovations contribute substantially to wage inequality.
Technology-Skill Complementarity in a Globalized World
AbstractThis paper investigates skill-biased technical change at the firm level using rich Norwegian data. In the theoretical framework, firms invest in R&D to enhance their productivity which has a factor-neutral and a skill-biased component. Firms investing in R&D are found to have higher levels and growth rates of skillbiased productivity. The estimated growth rate of skill-biased productivity is sizable enough to account for the majority of the observed increase in the skill premium in Norway over the sample period. The results are supported by exploiting a policy change to estimate the causal effect of innovation on relative skill demand.
- J0 - General
- O0 - General