Demographics and Innovation
78 Pages Posted: 29 Nov 2017 Last revised: 22 Dec 2017
Date Written: December 22, 2017
We argue that a younger labor force produces more innovation. Using the native born labor force projected based on local historical births, we find that a younger age structure causes significantly more innovation. We use three successive levels of analysis – commuting zones, firms, and inventors – to eliminate or examine effects such as firm and inventor life cycles. We also find that innovation activities reflect the innovative characteristics of younger labor forces. Our results indicate that younger people as a group – inventors interacting with non-inventors – produce more innovation through the labor supply channel rather than through a financing supply or consumer demand channel.
Keywords: Innovation; Demographics; Age structure; Labor markets; Firms; Inventors; Patents
JEL Classification: G31, J11, J13, J21, J24, O31, O32, O33, O34
Suggested Citation: Suggested Citation