Munich Personal RePEc Archive

Innovation and Income Inequality: World Evidence

Benos, Nikos and Tsiachtsiras, Georgios (2019): Innovation and Income Inequality: World Evidence.

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In this paper we explore the effect of innovation on income inequality using annual country panel data for 29 countries. We demonstrate that innovation activities reduce personal income inequality by matching patents from the European Patent Office with their inventors. Our findings are supported by instrumental variable estimations to tackle endogeneity. The results are also robust with respect to various inequality measures, alternative quality indexes of innovation, truncation bias, the use of patent applications together with granted patents and different ways to split or allocate patents.

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