Innovation and Labor Market Dynamics
Paper Session
Saturday, Jan. 3, 2026 2:30 PM - 4:30 PM (EST)
- Chair: April Burrage, Stanford University
Borrowing for Breakthroughs: Student Loans and Innovation
Abstract
This project investigates the impact of higher education financing on innovation, focusing on how student loan policies shape the innovative potential of individuals. Leveraging a novel dataset linking administrative patent records to consumer credit data, we first document a variety of stylized facts pertaining to household finance and innovation, including event studies of credit scores around the time of innovation and age-debt profiles of inventors in comparison to the general population. Then, we explore the causal relationship between access to student loans and the likelihood of subsequent patent filings. Our quasi-experimental design exploits changes in federal student loan limits to estimate causal effects, revealing that increased borrowing capacity causes higher rates of patenting among constrained borrowers. While preliminary, the findings suggest that alleviating credit constraints through student loan policy may generate significant social spillovers by enabling broader participation in innovation. This research contributes to understanding the role of education financing as a lever for sustaining economic growth and reducing innovation disparities across socioeconomic groups.The Returns to Recognition: Patent Grants and Inventors' Life Trajectories
Abstract
Patents are typically viewed as generating private value for firms and public value through knowledge spillovers but less attention has been paid to the question, what’s in it for the inventor? We study this question using examiner leniency as exogenous variation, and find evidence that suggests receiving a patent grant reshapes an inventor's life trajectory. Patent receipt significantly increases entry into high-growth entrepreneurship, including founding and working at VC-backed startups, while others advance internally at firms through higher retention and promotion. Mechanism tests support the development of complementary leadership, networking, and social skills that expand opportunities rather than merely boosting confidence. Such recognition also induces technological specialization, superstar collaborations, and breakthrough inventions. Overall, the evidence suggests that patents bolster recognition of a person’s underappreciated innovativeness, exposing a new channel through which innovation policy shapes life meaning.Common Ownership and The Mobility of Startup Talent
Abstract
Recent research has documented the widespread prevalence of common ownership of startups by venture capital (VC) investors and its influence on firm performance and strategic outcomes (Gonzalez-Uribe, 2020; Li, Liu, and Taylor, 2023; Eldar and Grennan, 2024; Leccese, 2024). This project investigates how common VC investor ownership shapes the reallocation of talent across startups within the same portfolio. We propose a conceptual framework featuring three distinct mechanisms: (i) a collusive channel, in which common VCs suppress wage competition and reduce talent mobility across portfolio firms; (ii) a coordination channel, where VCs redeploy talent to firms with better fit or greater potential; and (iii) a passive reallocation channel, in which talent shifts occur following startup failure. These mechanisms imply distinct patterns in labor flows, wage dynamics, and timing. To investigate these dynamics, we combine comprehensive VC investment data from PitchBook with high-resolution employment data from Revelio Labs. By analyzing patterns of within-portfolio labor mobility, this study seeks to shed new light on how VC investors shape the organization and allocation of innovation-related human capital.Discussant(s)
Ina Ganguli
,
University of Massachusetts-Amherst
Joan Farre-Mensa
,
University of Illinois-Chicago
Katie Moon
,
University of Colorado-Boulder
Andrew Toole
,
U.S. Patent and Trademark Office
JEL Classifications
- O3 - Innovation; Research and Development; Technological Change; Intellectual Property Rights
- J3 - Wages, Compensation, and Labor Costs