We look at how the arrival of an invention affects wage returns and the probability of moving out of employment for white- and blue-collar co-workers of the inventor. First results suggest that older workers are hurt by the arrival of an invention. This negative effect disappears when we control for education and, in particular, for the time since obtaining the last formal degree, that is, distance to human capital frontier. If anything, this effect is slightly higher for non-STEM than STEM-educated co-workers. This result suggests that retraining programs could be helpful in making the process of creative destruction and economic growth more inclusive.
Philippe Aghion, Ufuk Akcigit, Ari Hyytinen and Otto Toivanen
8 July 2024
Review of Economics and Statistics 106(4) , pp.974-982, 2024
DOI: 10.1162/rest_a_01262
https://direct.mit.edu/rest/article/106/4/974/113777/A-Year-Older-A-Year-Wiser-and-Farther-from
This work is published under POID and the CEP's Growth programme.