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Demographics and Innovation

78 Pages Posted: 29 Nov 2017 Last revised: 22 Dec 2017

François Derrien

HEC Paris - Finance Department

Ambrus Kecskes

York University - Schulich School of Business

Phuong-Anh Nguyen

York University - Schulich School of Business

Date Written: December 22, 2017

Abstract

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

Derrien, François and Kecskes, Ambrus and Nguyen, Phuong-Anh, Demographics and Innovation (December 22, 2017). HEC Paris Research Paper No. FIN-2017-1243. Available at SSRN: https://ssrn.com/abstract=3076971

François Derrien

HEC Paris - Finance Department ( email )

1 rue de la Liberation
Jouy-en-Josas Cedex, 78351
France
33 1 39 67 72 98 (Phone)

HOME PAGE: http://www.hec.fr/derrien

Ambrus Kecskes (Contact Author)

York University - Schulich School of Business ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada

Phuong-Anh Nguyen

York University - Schulich School of Business ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada

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