Innovation and Top Income Inequality | Zendy

Philippe Aghion | Zendy; Ufuk Akcigit | Zendy; Antonin Bergeaud | Zendy; Richard Blundell | Zendy; David Hémous | Zendy

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Innovation and Top Income Inequality

Author(s) -

Philippe Aghion,

Ufuk Akcigit,

Antonin Bergeaud,

Richard Blundell,

David Hémous

Publication year - 2018

Publication title -

the review of economic studies

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 15.641

H-Index - 141

eISSN - 1467-937X

pISSN - 0034-6527

DOI - 10.1093/restud/rdy027

Subject(s) - economics , inequality , causality (physics) , economic inequality , instrumental variable , panel data , social mobility , income inequality metrics , income distribution , demographic economics , variable (mathematics) , econometrics , labour economics , sociology , mathematics , physics , quantum mechanics , mathematical analysis , social science

In this article, we use cross-state panel and cross-U.S. commuting-zone data to look at the relationship between innovation, top income inequality and social mobility. We find positive correlations between measures of innovation and top income inequality. We also show that the correlations between innovation and broad measures of inequality are not significant. Next, using instrumental variable analysis, we argue that these correlations at least partly reflect a causality from innovation to top income shares. Finally, we show that innovation, particularly by new entrants, is positively associated with social mobility, but less so in local areas with more intense lobbying activities.

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