The Effects of Scientists and Engineers on Productivity and Earnings at the Establishment Where They Work

35 Pages Posted: 13 Jun 2017 Last revised: 3 Mar 2021

See all articles by Erling Barth

Erling Barth

Institute for Social Research, Norway; Department of Economics, University of Oslo; IZA Institute of Labor Economics

James C. Davis

US Census Bureau

Richard B. Freeman

National Bureau of Economic Research (NBER); University of Edinburgh - School of Social and Political Studies; Harvard University; London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP)

Andrew Wang

National Bureau of Economic Research (NBER)

Date Written: June 2017

Abstract

This paper uses linked establishment-firm-employee data to examine the relationship between the scientists and engineers proportion (SEP) of employment, and productivity and labor earnings. We show that: (1) most scientists and engineers in industry are employed in establishments producing goods or services, and do not perform research and development (R&D); (2) productivity is higher in manufacturing establishments with higher SEP, and increases with increases in SEP; (3) employee earnings are higher in manufacturing establishments with higher SEP, and increase substantially for employees who move to establishments with higher SEP, but only modestly for employees within an establishment when SEP increases in the establishment. The results suggest that the work of scientists and engineers in goods and services producing establishments is an important pathway for increasing productivity and earnings, separate and distinct from the work of scientists and engineers who perform R&D.

Suggested Citation

Barth, Erling and Davis, James C. and Freeman, Richard B. and Wang, Andrew, The Effects of Scientists and Engineers on Productivity and Earnings at the Establishment Where They Work (June 2017). NBER Working Paper No. w23484, Available at SSRN: https://ssrn.com/abstract=2984661

Erling Barth (Contact Author)

Institute for Social Research, Norway ( email )

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Department of Economics, University of Oslo ( email )

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James C. Davis

US Census Bureau ( email )

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Richard B. Freeman

National Bureau of Economic Research (NBER) ( email )

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Andrew Wang

National Bureau of Economic Research (NBER) ( email )

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