Inequality and Innovativeness
University of Michigan - Center for the Study of Complex Systems
University of Michigan - Department of Ecology and Evolutionary Biology
March 1, 2013
In this note, we construct two theoretical models that analyze the relationship between inequality of access and rates of innovation as well as correlative data that show a negative correlation between income inequality and levels of innovativeness. Our two models suggest that unequal access to problems slows innovation by reducing the level and variety of human capital applied to problems. More interestingly, both models show that the rate of innovation decline becomes much more pronounced as problems become more difficult. Thus, the costs of inequality may be increasing as the problems that societies face become more challenging.
Number of Pages in PDF File: 10
Keywords: Inequality, Innovation
JEL Classification: D83, D31
Date posted: March 2, 2013
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