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Graduate education and long‐term inventive performance: Evidence from undergraduates' choices during recessions

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  • Koichiro Onishi
  • Sadao Nagaoka

Abstract

Using individuals' life‐cycle invention data, we investigate how graduate education affects inventive performance and inventors' abilities to absorb and combine diverse knowledge sources. To control for the endogeneity of educational choice, we use the status of college labor markets as an instrumental variable (IV), specifically the difference between the unemployment rate and its long‐run average rate by academic field. We find that graduate education, induced by the IV, significantly enhances inventive performance and the scope of exploited knowledge, exceeding the levels implied by ordinary least squares. Graduate education can have a significant causal effect on inventive capability and performance.

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  • Koichiro Onishi & Sadao Nagaoka, 2020. "Graduate education and long‐term inventive performance: Evidence from undergraduates' choices during recessions," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 29(3), pages 465-491, July.
    • Handle: RePEc:bla:jemstr:v:29:y:2020:i:3:p:465-491
    DOI: 10.1111/jems.12382
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