DP8537 Education and Invention

Author(s): Otto Toivanen, Lotta Väänänen
Publication Date: August 2011
Date Revised: June 2013
Keyword(s): ability bias, citations, education, engineers, growth, innovation, invention, inventors, patents
JEL(s): I21, J24, O31
Programme Areas: Industrial Organization
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=8537

Modern growth theory puts invention on the center stage. Inventions are created by individuals, raising the question: can we increase number of inventors? To answer this question, we study the causal effect of M.Sc. engineering education on invention, using data on U.S. patents? Finnish inventors and the distance to the nearest technical university as an instrument. We find a positive effect of engineering education on the propensity to patent, and a negative OLS bias. Our counterfactual calculation suggests that establishing 3 new technical universities resulted in a 20% increase in the number of USPTO patents by Finnish inventors.