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Talent Allocation and Long-Term Innovation: Evidence from the Massachusetts Institute of Technology - TDPE

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Top college graduates are disproportionately inventive, yet little is known about how they select into different career paths and innovate. This paper uses detailed data on MIT bachelor’s graduates to study the impact of the 2008–09 financial crisis on individuals’ early career choices and subsequent patent production. Compared to the classes of 2007 and 2008, which graduated before the peak of crisis, the classes of 2009 and 2010 were significantly less likely to enter finance at college graduation and significantly more inventive in the following six years. However, reduced entry into finance is unlikely to have been the primary channel through which patent production increased, since those at the margin of working in finance had different characteristics from those at the margin of becoming an inventor. the author provides suggestive evidence that the increase in patent production was driven by increased graduate degree attainment. Using data on earlier cohorts dating back to 1994, she also finds a strong association between educational attainment and patent production in the longrun, suggesting that shocks to early career choices could have long-term effects on innovation through specialization.  

Pian Shu an assistant professor in Strategy & Innovation at Scheller College of Business, Georgia Institute of Technology. Her current research focuses on the origin, development, and deployment of innovative and entrepreneurial talent. She has several projects examining different populations of innovators and the demand-side forces, such as globalization, that could influence the supply of innovators and entrepreneurs. Her main research stream uses data on MIT bachelor's graduates to study the career choices, human-capital accumulation, and long-term productivity of elite scientists and engineers.

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Sponsored by: Moynihan Institute of Global Affairs

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Exterior of Maxwell in black and white when there was no Eggers building

We’re Turning 100!

To mark our centennial in the fall of 2024, the Maxwell School will hold special events and engagement opportunities to celebrate the many ways—across disciplines and borders—our community ever strives to, as the Oath says, “transmit this city not only not less, but greater, better and more beautiful than it was transmitted to us.”

Throughout the year leading up to the centennial, engagement opportunities will be held for our diverse, highly accomplished community that now boasts more than 38,500 alumni across the globe.