Who Becomes an Inventor in America? The
Importance of Exposure to Innovation by Alexander M. Bell, Raj Chetty,
Xavier Jaravel, Neviana Petkova & John Van Reenen
Abstract:
We characterize the factors that determine who
becomes an inventor in America by using de-identified data on 1.2 million
inventors from patent records linked to tax records. We establish three sets of
results. First, children from high-income (top 1%) families are ten times as
likely to become inventors as those from below-median income families. There
are similarly large gaps by race and gender. Differences in innate ability, as
measured by test scores in early childhood, explain relatively little of these
gaps. Second, exposure to innovation during childhood has significant causal
effects on children's propensities to become inventors. Growing up in a
neighborhood or family with a high innovation rate in a specific technology
class leads to a higher probability of patenting in exactly the same technology
class. These exposure effects are gender-specific: girls are more likely to
become inventors in a particular technology class if they grow up in an area
with more female inventors in that technology class. Third, the financial
returns to inventions are extremely skewed and highly correlated with their
scientific impact, as measured by citations. Consistent with the importance of
exposure effects and contrary to standard models of career selection, women and
disadvantaged youth are as under-represented among high-impact inventors as
they are among inventors as a whole. We develop a simple model of inventors'
careers that matches these empirical results. The model implies that increasing
exposure to innovation in childhood may have larger impacts on innovation than
increasing the financial incentives to innovate, for instance by cutting tax
rates. In particular, there are many “lost Einsteins” — individuals who would
have had highly impactful inventions had they been exposed to innovation