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Graduate education and long‐term inventive performance: Evidence from undergraduates' choices during recessions
Author(s) -
Onishi Koichiro,
Nagaoka Sadao
Publication year - 2020
Publication title -
journal of economics and management strategy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.672
H-Index - 68
eISSN - 1530-9134
pISSN - 1058-6407
DOI - 10.1111/jems.12382
Subject(s) - endogeneity , instrumental variable , scope (computer science) , unemployment , term (time) , recession , econometrics , graduate students , economics , demographic economics , psychology , labour economics , mathematics education , computer science , pedagogy , macroeconomics , physics , quantum mechanics , programming language
Using individuals' life‐cycle invention data, we investigate how graduate education affects inventive performance and inventors' abilities to absorb and combine diverse knowledge sources. To control for the endogeneity of educational choice, we use the status of college labor markets as an instrumental variable (IV), specifically the difference between the unemployment rate and its long‐run average rate by academic field. We find that graduate education, induced by the IV, significantly enhances inventive performance and the scope of exploited knowledge, exceeding the levels implied by ordinary least squares. Graduate education can have a significant causal effect on inventive capability and performance.