Incentives and Creativity: Evidence from the Academic Life Sciences

48 Pages Posted: 3 Nov 2009 Last revised: 6 Apr 2023

See all articles by Pierre Azoulay

Pierre Azoulay

Massachusetts Institute of Technology (MIT) - Sloan School of Management; National Bureau of Economic Research (NBER)

Joshua Graff Zivin

School of Global Policy and Strategy; National Bureau of Economic Research (NBER)

Gustavo Manso

University of California, Berkeley - Haas School of Business

Date Written: October 2009

Abstract

Despite its presumed role as an engine of economic growth, we know surprisingly little about the drivers of scientific creativity. In this paper, we exploit key differences across funding streams within the academic life sciences to estimate the impact of incentives on the rate and direction of scientific exploration. Specifically, we study the careers of investigators of the Howard Hughes Medical Institute (HHMI), which tolerates early failure, rewards long-term success, and gives its appointees great freedom to experiment; and grantees from the National Institute of Health, which are subject to short review cycles, pre-defined deliverables, and renewal policies unforgiving of failure. Using a combination of propensity-score weighting and difference-in-differences estimation strategies, we find that HHMI investigators produce high- impact papers at a much higher rate than a control group of similarly-accomplished NIH-funded scientists. Moreover, the direction of their research changes in ways that suggest the program induces them to explore novel lines of inquiry.

Suggested Citation

Azoulay, Pierre and Graff Zivin, Joshua and Manso, Gustavo, Incentives and Creativity: Evidence from the Academic Life Sciences (October 2009). NBER Working Paper No. w15466, Available at SSRN: https://ssrn.com/abstract=1498967

Pierre Azoulay (Contact Author)

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

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National Bureau of Economic Research (NBER)

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Joshua Graff Zivin

School of Global Policy and Strategy ( email )

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National Bureau of Economic Research (NBER)

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Gustavo Manso

University of California, Berkeley - Haas School of Business ( email )

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