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