Are Intellectual Property Rights Unfair?

28 Pages Posted: 29 Jan 2003

See all articles by Gilles Saint-Paul

Gilles Saint-Paul

University of Toulouse I - GREMAQ-IDEI; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

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Date Written: January 2003

Abstract

If redistribution is distortionary, and if the income of skilled workers is due to knowledge-intensive activities and depends positively on intellectual property, a social planner which cares about income distribution may in principle want to use a reduction in Intellectual Property Rights (IPRs) rather than redistributive transfers. On the one hand, such a reduction reduces statis inefficiency. On the other hand, standard redistribution also reduces the level of R&D because it distorts occupational choice. We study this possibility in the context of a model with horizontal innovation, where the government, in addition to taxes and transfers, controls the fraction of innovations that are granted patents. The model predicts that standard redistribution always dominates limitations to IPRs.

Keywords: Intellectual property rights, innovation, income distribution, inequality, redistribution, welfare state, human capital

JEL Classification: D30, H23, I30, J24, J31, O34

Suggested Citation

Saint-Paul, Gilles, Are Intellectual Property Rights Unfair? (January 2003). CEPR Discussion Paper No. 3693. Available at SSRN: https://ssrn.com/abstract=374480

Gilles Saint-Paul (Contact Author)

University of Toulouse I - GREMAQ-IDEI ( email )

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Centre for Economic Policy Research (CEPR)

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CESifo (Center for Economic Studies and Ifo Institute)

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IZA Institute of Labor Economics

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