10/7: Ufuk Akcigit

[shevajia]

Comment below with questions or thoughts about the reading for this week's workshop.

Please make your comments by Wednesday 11:59 PM, and upvote at least five of your peers' comments on Thursday prior to the workshop. You need to use 'thumbs-up' for your reactions to count towards 'top comments,' but you can use other emojis on top of the thumbs up.

[Lynx-jr]

Professor Akcigit: Thanks so much for coming to our workshop and I'm always a fan of your patent papers! Several questions: 1) It seems like the criteria for talent (the Danish military test) is mainly used for males, and I think it would be safer to conclude that the research results mainly apply to the male portion of the population. But I also googled about gender equality and found that Denmark ranks 2nd in the EU on the Gender Equality Index in 2020. Plus, Denmark didn't rank 2nd until 2010 so for the scope of this study - 2001 to 2013 - there was still some level of gender inequality. Were these facts deliberately taken into consideration while deriving the conclusion? 2) How did you take the change in patent application policies into account in your model? Given the application cycles of patents, my immediate thought is that PhDs have a longer timeframe to research, hence being more likely to own patents rather than college graduates. And if the EPO's Denmark office has sped up their processing time during 2001-2013, allowing more applications to be examined, then the effect of R&D investment and PhD policies will be further weakened. 3) This is not a question, but in one of my projects last year for the Large Scale computing class *, I was responsible for examining the relationships of patents citation within different CPC sections. My result tells me that there are fields that do not cite much from patents outside their fields while some do. So I'm kind of concerned that your paper did not address that even within STEM fields, the speed for innovation varies. Correct me if I'm wrong, and again thanks for coming!

• a big shout out to my awesome teammates in the Patent Stargazer team, Chuqing, Sirui, and Yi for supporting my whole maniac, and to Prof. Clindaniel for giving great suggestions for the project since the Winter Quarter.

[FranciscoRMendes]

Is there an inherent assumption of equivalence between IQ and "talent"? It seems like there is an assumed equivalence between talent and IQ based on the paper. Universities select individuals based on their IQ which is observable NOT their talent which is unobservable, is it not possible that IQs are lower due to systematic factors rather than talent itself (I mean if you are bad at stress during ANY kind of test youre probably going to have a low IQ, so basically universities now accept more people who are bad at taking tests NOT lower talent). This line of reasoning depends so much on how you define talent. What are some other definitions? MPk for any labour unit i?

Fact 3 concludes that IQ and parental income are highly correlated (albeit not perfectly) does this not suggest that the goal of any government would be to increase parental income then? And not educational policy?

What are the long run effects of education policies on growth rates in the long run? Since model also does not account for multiple inherent classes of people facing frictions that cannot be classified as economic or IQ, for instance, race. As a direct consequence of this it turns out that educational policies are more efficient in unequal societies, however, in reality, educational policies only really serve to increase the number of students from the dominant race, class, caste because the PhD slots N <<< number of people in the dominant race. This would eventually create more inequality as these people would go on to have higher incomes correlated to higher IQs and then produce more PhDs. And the cycle continues.

How could we use the results of this paper for a larger more diverse country like the US or India, how general are the results? Since the slots for a PhD are so few pre and post increase in comparison to the population size could you please explain how these results would translate to more diverse or larger countries?

[Thiyaghessan]

Hey Professor, thank you so much for sharing your research with us. From your paper, I learnt that only a fraction of those with high IQs and high parental income end up doing a PhD program. Given that PhD students are likelier to be innovators, and you started with a central question of determining how societies select which individuals get to become innovators, that got me wondering about what possibly influences personal preference formation in this aspect.

I think it might be useful to look at demographic breakdowns of PhD holders and PhD holders who do create patents and thus invent to see if there are other systemic factors that prevent individuals from being selected. For example, possible gender or racial biases within particular fields might discourage individuals with the ability, means and interest to pursue a PhD from doing so if they view those fields as being under the control of particular in-groups which they themselves are not a part of.

[pranathiiyer]

Thanks so much for sharing such an interesting topic of research with us!

I also had similar thoughts about understanding if talent and IQ are synonymous and how generalisable can these results be.

Additionally, given that only 23% of all patents came from PhDs, and the fact that increase in PhD slots was accompanied by a decrease in IQ of candidates, how much could an increase in students enrolling in PhDs (assuming they go on to innovate), actually translate into an aggregate increase in innovation i.e. if the goal is to increase innovation, would it be more meaningful to look at how non PhD patents can be incentivised too?

This is not based on a paper but a general enquiry given the context of today's times. With the advent of interdisciplinary sciences, and courses like the computational social sciences which bring computational or STEM approaches to social sciences, what do you think could be an impact on policy making while looking at innovation beyond STEM fields? i.e. how feasible and sensible would it be to account for student enrolments in the social sciences where innovation might not lead to patents?

[tangn121]

Thank you Professor Ufuk Akcigit for attending our workshop and introducing your research to us. This research provides a thorough study on the connection between higher education and innovation policy. I found it quite interesting that education policy is more effective in more unequal societies in stimulating innovation.

But I have a question about this research, it is said that Denmark is a small open economy and foreign inventors account for only about 10% of total inventors in you data. This is in contrast with countries such as the United States. I am wondering if the result is a special case in Denmark and how could we apply it to other countries such as the United States?

[borlasekn]

Thank you Professor Ufuk Akcigit for taking the time to speak with all of us!

I have a question regarding the phenomenon known as the Flynn effect. As James Flynn notes, there has been an observed increase in the IQ of populations over the course of the 20th century. I understand that the measures of IQ adapt based on how the population IQ shifts, such that the average IQ remains the same. However, if the average IQ continues to increase, how would you guess that this would effect the talent measures and patents throughout the 21st century?

[zhiqianc]

Hi Prof. Akcigit. Thanks so much for sharing your research. I am quite impressive with the repurposing of such extensive dataset in the reading. With the data from different sources ten empirical findings are clearly stated and organized to show the links between talent, higher education and innovation. Besides, the data are also used to clibrate the model with the simulated method of moments. In the reading the growth-maximizing policy mix is interesting, too. Besides the budget, are there some factors that influence such optimal mix and should be also considered? Because generally the implementation of policies will lead to different effects thanks to the dinstinctive characteristics of different societies, such as economic condition, education condition and so on. What kind of assumption about the conditions is the optimal mix theory in the reading based on?

[Qiuyu-Li]

Thanks so much for sharing such an interesting topic of research with us!

[nswxin]

Professor Akcigit, thank you for coming. In your paper, you drew the conclusion that " In highly unequal societies, education policy is likely to be significantly more effective than R&D policy " and vice versa. Unfortunately, all forms of societies are neither absolute equal nor unequal. Thus, how should society, considering its level of equality, apply your model and put forwards policies accordingly? How should the leader of society balance R&D and education?

[javad-e]

Thank you for presenting your work in this workshop! There are some entrepreneurs that believe formal graduate education is becoming less and less important as information is becoming more accessible. When encountering data such as those presented in fact 5 and figure 11, they would argue that the quantity of patents might not be the most important factor to rely on when considering innovation. What are your thoughts on the importance of formal graduate education in the future?

[sabinahartnett]

Thank you for sharing your work Prof. Akcigit,

historically, a lot of innovation is born out of necessity; whether it is experts in one field (often the case with PhD holders/highly educated individuals) transferring fields or when individuals experience needs that are not currently being met or cannot be met efficiently. There is, however, also a history of discriminatory practices in higher education and patent granting. What other proxies have been used as a metric for innovation and do the trends in those studies correlate with your findings?

I won't be present at the workshop but someone else is welcome to ask this question!

[nijingwen]

Thanks a lot for joining our workshop this week and sharing your paper. Education is always a big thing in our society. Not only for the productivity, the unequal education level will also lead to income inequality. I really love your session 3.1 which is environment and equilibrium. There are three significant factors: "talent, financial constraints, preferences will affect people whether acheieve a phd degree or not and uses the probability function to discussion them one by one

[k-partha]

Thank you for your presentation, Prof. Akcigit. Given that the findings of your paper are contextually centered around the labor market in Denmark, how generalizable do you expect your findings are for lower-income, high-friction societies? What key parameters/aspects of your model change when we discuss education policy in a radically different institutional setup?

[helyap]

Thanks, Prof. Akcigit.

Like many of my peers on the forum, I also wonder about the equivalence of "talent" and "IQ." Relatedly, I am also curious about how human capital is conceptually defined and what you see as potential ways to measure human capital.

Separately, seeing as the model was supported by data collected in Denmark, a well-developed nation with broad socialized support (for also education systems), is the proposed model generalizable to R&D broadly?

[MkramerPsych]

Dr. Akcigit,

Thank you for sharing your research with us! In asking my question I want to echo my cohort mates confusion regarding both the linkages between intelligence and innovation as well as the generalizability of your findings.

Rather than asking about the specific links between IQ, academic success and innovation as seen in your analysis of Denmark, I am curious at a methodological level how you disentangle the directionality and potential confounds when examining a highly social process like innovation. Could there potentially be more complex social dynamics involved when examining these linkages in smaller vs larger countries? For example, it seems like the link between academic support and income could modulate as a result of academic policy.

[ValAlvernUChic]

Hi Prof. Akcigit!

Thanks for sharing your paper with us! Along the same thread as some of my peers, I had a question on how the model for innovation could change and be helpful in countries whose GDP is significantly lower than Denmark's and whose education baseline might be much lower. The second finding refers to the proportion of GDP but I'm thinking that might change if there's less money available - some economies might not be able to majorly prioritize a time-dependent education and R&D policy to Denmark's extent, even though they arguably need it most in the long run. How can we negotiate these short-term and long-term needs?

[afchao]

Thank you for presenting to our group!

Are all ideas equally valuable? A novel algorithm which improves the accuracy of Domino's Pizza Tracker™ by 25% seems like it would contribute less to net productivity than one that improves the speed of a computer's BLAS by 25%, but there are innovative people employed by R&D teams to solve both of these problems who arrived at those stations by the mechanism you elaborate in this paper. If the end goal is to benefit society by more-efficiently allocating talent to research, I feel like there should be some account of how much society benefits from a given piece of research here!

[ZHE-ZHANG-0213]

Thank you for sharing this interesting work with us Prof. Akcigit！

[hhx2207061197]

Thanks so much for sharing such an interesting topic of research with us!

[xin2006]

Hi Prof. Akcigit! Thanks for sharing your work and taking time to speak with us. Your paper connects higher education policy to productivity growth. From your research, education policy is more effective in more unequal societies in stimulating innovation, and less effective in stimulating economic growth. So how to tell the inequality in a society and the necessity of education subsidy? Does the fraction of people who can afford education is an adequate measure of educational inequality? Do we need to consider differences in education quality?

[JunoWuu]

Hi Prof. Akcigit, Thank you for sharing your work with us. You have mentioned that a lot of education policies take long time to show its full impact. Is there anyway that you could predict its impact or is there any other way that you suggest to figure it out with shorter time?

[xzmerry]

WoW, It is super great to have you Prof. Akcigit! I really love many of your research about firm dynamics and entrepreneurship. As many of my peers, my question is 1) whether it is suitable to measure one's potential of innovation with IQ? For example, the ability to think out of box might not be accurately recorded by IQ. 2) A lot of discussion is about the 'marginal' PhD student, either removing some barrier with financial support or being careful when expand the students pool as this will bring lower IQ students. However, the fact that this discussion relied on is kind of tricky. Is there any empirical evidence behind the 10 facts? Besides, how quick is the IQ drop-off? If it only drops a little when the pool expand, this might not be a problem as they can be very innovative as well (though may be negligibly less than students in the original pool).

[taizeyu]

I am so impressed that the innovation policy and education policy are able to reduce friction. High IQ, Family, enrollment PHD all have some relationship. This paper really reflect the phenomenon of society

[erweinstein]

I echo the comments of my peers that we really appreciate Professor Akcigit taking the time to share this very interesting work with us! Regarding the Danish government's policy change (mandating expansion of PhD slots/places), I understand that the policy change seems to have led to more total doctoral students but with the new, "marginal" doctoral students being of lower IQ, but were there any other significant group differences between them and the pre-policy-change PhD students? Would it be worthwhile seeking to learn even more about these marginal would-be researchers/PhDs? And does the IQ drop-off you found suggest that the non-financial barriers to academia (lack of mentors and role-models, discrimination against underrepresented groups, additional challenges faced by first-generation students like the "hidden curriculum", etc.) might not be as great as it is often argued, at least in famously-very-egalitarian Denmark?

[Raychanan]

Thanks for sharing your work with us on Thursday's workshop!

[yujing-syj]

Thanks so much for sharing this interesting paper with us! Honestly, there are a lot of materials for me to digest in your work. The method of discussing the different effects caused by education policy and R&D policy gives me inspiration of me research interest.

[chrismaurice0]

Excited to hear you discuss your paper tomorrow! I would love to hear you speak to the current labor shortages taking place around the United States and whether or not you think a competitive job market (where the demand for labor is greater than the supply) has any impact on innovation.

[TwoCentimetre]

It seems that Prof. Akcigit is the first econ related professor who come to this workshop since I entered this program. Finally, this workshop has something to do with econ student. Great.

[Sirius2713]

Thanks a lot, Prof. Akcigit! The setting of this paper is in Denmark. I'm wondering if policies in US will have the same pattern of effects on cultivating the inventors.

[egemenpamukcu]

Thanks for presenting at the workshop Professor Akçiğit, I would like to hear more about your take on the heterogeneous impact of higher education in terms of disciplines and institutions. I have heard that there is not much variability in Danish higher education institutions' overall prestige among, funding, or tuition. Which traits in a university do you think would amplify these results and how can this inform governance in higher education?

[ChongyuFang]

It is wonderful to have Prof. Akcigit here in our workshop! Though I am not an econ student that focuses on your area of interest, I am still excited to hear you discuss your paper and how you incorporated education and innovation into growth models.

[JoeHelbing]

"Education policy is also more effective in societies with high income inequality."

I understand the point you are making here, and the further explanation on page 5 (pasted below) was even more explicit in clarifying it, but to put on the layman's hat for a moment, I feel like this phrasing has the potential to be misconstrued especially where information may be pulled from the article for dissemination to a general audience that will never read the original paper. This is not a dig at this specific phrasing or your work, it merely stuck out to me as a potential example of the difficulty of communicating economic research.

I'm curious how you see the difficulties the field of Economics faces in communicating with the public and the problem of misunderstanding or misusing economic research.

"Third, our analysis suggests that education policy is more effective in more unequal societies in stimulating innovation. We analyze the responsiveness of policy under different levels of financial frictions. In an environment with lower financial frictions, fewer individuals are unable to pay for schooling; thus, subsidizing the cost of education is less effective in stimulating economic growth. In an economy where no one is constrained, educational subsidies have no effectiveness, as individuals who want to pursue a career in research will do so regardless. In an economy with full frictions, educational subsidies are the most effective policy tool for innovation"

[Emily-fyeh]

Hi Prof. Akcigit! Thanks for sharing for your working paper! Similar to some of my peers, I am also curious about the effect of the cultural context of R&D environment in Denmark, and to what extent can we infer the result of this model and pattern to other developed countries, for example the Netherlands or Sweden.

[AlexPrizzy]

Thank you for visiting our workshop Prof. Akcigit! You highlight that domestic talent tends to be scare and relying solely on domestic talent can have diminishing returns. You also mention how education and R&D policy will have varying effects depending on the parental income inequality with the country. Though many countries have been experience a "Brain Drain" in recent years as talented individuals migrate out of economic concerns. This study was conducted in Denmark, where less economic equality is present making R&D policy more relevant. In a country as diverse as the United States, where there is wide spread inequality in education and parental income, but also a large domestic talent pool, would both Education and R&D policy changes together make a greater difference than just one of these components?

[sdbaier]

To my understanding, the proposed model assumes the choice of individuals to apply for a PhD in order to enter the research sector to be a single-shot, dichotomous event.

With career paths becoming increasingly flexible, how are people treated that select into, or out of research later on in their careers? Are they captured by your model in some shape or form? For example, mid-level research scientist moving into a management position, or the tendency of some scientists to gain a few years of industry experience prior to commencing a PhD program and a subsequent career in research. How would this skew the results?

[zhiyun0707]

Thanks Prof. Akcigit for coming to the workshop and sharing this wonderful paper with us! You address to a lot of points that interests me like the relationship between a person’s family background and the IQ “individuals enroll in PhD with wealthier parents have higher IQs than individuals with poorer parents.” Before reading the paper, I thought that IQ is more “nature” and parents could “nurture” the child through providing better educational opportunities that require wealth. Secondly, as some of my peers posted, “educational subsidies are the most effective policy tool in full friction economics” is also very interesting. Lastly, just as you write in the last section of the paper, I am looking forward to see the extensions of the paper and how the policy will work in other countries around the world.

[linhui1020]

Hi, Prof. Akcigit. Welcome to our CSS workshop. After reading your paper which discusses the difference of effectiveness of r&d subsidies and education policy on the innovation economy, I wonder whether for countries at the different economic stages (emerging or developed economy) and in different education systems (macro-level), the research result here will still be applicable. As you use patents as a measure of innovation output, does the category of patents matter? At the end of the paper, you mention immigration could be a further research direction, in an information world, innovation in a country is not necessarily produced by the citizens or residents, it can be contributed by talents in another country. Like many MNCs build R&D centers in other countries for employment of human talent, or outsource innovation service, how to measure such effect?

[LFShan]

Thank you, Professor. I am really interested to learn about the nature and nurture part of education and I am looking forward to the workshop.

[MengChenC]

Thanks for sharing the work. It is nice to examine education and innovation from the economic perspective. At the end of the paper, you mention the "domestic talent is scarce and induce a country to run into diminishing returns when the country only relies on a domestic talent pool. One way to ameliorate this problem could be to tap into international talent, drawing implications for immigration policy." What is other influence and how would you measure the benefit and deficit? Thank you.

[LynetteDang]

Thank you Professor Akçiğit for sharing your working paper with us! I found this paper extremely fun to read, thanks for the effort of showing all the maths behind the scene:) Since everyone is more or less asking question about the core concepts/difference between American/Danish PhD system/extension of what you are discussing, I am going to focus more on the method/model side. I do see that your initial setup is LP + H + M = 1, which seems to have good potential to later on extend into a classical ordinary differential equation (ODE) model so that you can better analyze the growth/decline of each population within the general population, while still putting a focus on human capital and occupational choice as you did in your choice of modeling. ODE will also give you the advantage of being able to analyze bifurcation points in addition to equilibria (which you have incorporated in your analysis) to give you some surprising findings! Just curious, have you ever thought about an alternative model like ODE? Thanks!

[XinSu6]

Thank you so much for sharing you work! And I have long been very impressed by your amazing research interests in firm dynamics and entrepreneurship. My question is how do you think your findings shared this time can be generalized into other fields? Looking forward to your speech.

[jsoll1]

Thank you for sharing your work with us! I'm super excited for the presentation and hope many of the questions from my peers and myself can be touched upon.

[FrederickZhengHe]

Thanks very much for this wonderful paper! Look forward to listening to your presentation tomorrow!

[sudhamshow]

Prof Ufuk, your paper was an amazing read. Thanks for your work on policy research. A few methodologies piqued my curiosity:

1. Like most of my peers, and as you yourself have mentioned, it would be a great opportunity to build a similar framework in developing countries with more variance in economic backgrounds and a relatively younger population. Would you still have built your framework around the precedent of ‘scarce talent’ and ‘career choice’? Wouldn’t regional factors (unavailability of research centres, etc) have to be accounted for?
2. In the derivation of the long-term relation between R&D subsidies and economic growth, would it be wrong to consider a factor in R&D that has a possibility to impede economic growth sometime in the future (for e.g, the invention of nuclear bomb, plastic)
3. You state in your research that with the least budget allocation for research, the most optimal strategy would be to invest exclusively in education subsidies. This seems a little counter-intuitive to me. Wouldn’t directly investing in a research centre (like a defence lab) promote more entry into research than subsidise education (where students aren’t held by a contract and have no obligation to contribute to research)?

Thank you

[BaotongZh]

Dear Professor Akcigit,

Thank you for sharing such a brilliant masterpiece. I totally agree with your thoughts, facts, methods, and models about the relationship between R&D subsidies and Education support and the professional selection of each individual, finally giving rise to the variation in productivity. However, several concerns I want to address here are that the gender barrier, the regional differences of evaluation/ranks regarding jobs, and the practicability of implementation.

1. Though government support is critical for education and helping those talents without wealth, gender barriers to higher education may exist in many regions.
2. People in some countries may value government officials as the highest career goal(especially in China, as far as I know) regardless of the subsidies in the research department. Each nation may have its unique circumstances.
3. As you mentioned in the paper, education support for removing fiscal constraints may take a long time to effect. So how to persuade government officials to implement them in the situation that they may need short-term benefits to secure their votes. Also, how to convey this scientific idea to normal people.

These comments are provided by an immature graduate student, if there are any mistakes, please correct me.

[a-bosko]

Hi Professor Akcigit,

Thank you for coming to our workshop! Your working paper on talent, human capital, and innovation is eye-opening.

In the paper, it is mentioned that the Danish government has required universities to double Ph.D. enrollment within 10 years. In turn, this has resulted in the decline of the average IQ amongst Ph.D. students. My question is one that many of my peers have also brought up: how certain can we be that IQ is a direct correlate of talent? Even though those with a higher IQ might be more likely to obtain a Ph.D., does this automatically mean that they are more talented than those with a lower IQ? Could it be possible that those with a higher IQ are just more likely able to navigate academia?

[ginxzheng]

Really looking forward to listening to your talk tomorrow! I have been admiring your research for a long time. I would also like to echo some previous comments and ask that, to what extent IQ can be used as a proxy of talents, and how to justify the linkage between talented people and human capital that makes a real contribution. Thanks!

Thank you Professor Akçiğit for sharing your working paper with us! I found this paper extremely fun to read, thanks for the effort of showing all the maths behind the scene:) Since everyone is more or less asking question about the core concepts/difference between American/Danish PhD system/extension of what you are discussing, I am going to focus more on the method/model side. I do see that your initial setup is LP + H + M = 1, which seems to have good potential to later on extend into a classical ordinary differential equation (ODE) model so that you can better analyze the growth/decline of each population within the general population, while still putting a focus on human capital and occupational choice as you did in your choice of modeling. ODE will also give you the advantage of being able to analyze bifurcation points in addition to equilibria (which you have incorporated in your analysis) to give you some surprising findings! Just curious, have you ever thought about an alternative model like ODE? Thanks!

I didn't see the relevance of "the advantages of ODEs" here? I think the value functions in Appendix C showed a very cool application of optimization control. Please correct me if I didn't see it clearly. I would also like to know whether it is possible to add some time dynamics in the model.

[zoeyjiao1104]

Thank you for coming to the workshop Professor Akcigit!

I would like to know more about the endogenous growth model and what kind of datasets we could employ this model.

[hazelchc]

Thank you very much for sharing your work! Given the uniqueness of Denmark in terms of social welfare and educational systems, as well as demographic composition, I'm just curious about whether it is possible to apply the results to other countries? Thanks!

[chuqingzhao]

Thank you Professor Akcigit for sharing your work with us! It is a really thought-provoking paper which explores how education policy would affect individual's choice into higher education. I have three questions for the work:

1. Beside family incomes or financial constraints, I wonder whether and how institutional imperatives would affect individual's behaviors? Instead of understanding people choose to do research, what do you think on the opposite direction--how science choose talents? Whether those people coming from higher income family are more likely to access to resources and to be "trained" to produce mainstream science? Social factors behind the family incomes might also be related with interesting questions like how research institutions make decisions on what is science and non-science? How and why scientific communities form a certain convention or norm in scientific research? For example, on the one hand, graduate students who quit their phd programs could have financial concerns; but on the other hand, some people might feel "stressful" or "marginalized" in their research fields. There might be other factors affect individual's behavior. In your accounts, you mentioned that "selection into higher education depending on parental income ", but behind the financial resources what are other social factors could affect people's choice?

2. Your results implies that R&D and education policy could encourage productivity and educate more talents. It can be effective and explainable to those disciplines that need more "muscles" than "brains" (like biology or medical science you need researchers to do experiments and play around with data). I am curious how about those disciplines that focus on "brains" than "muscles" (such as social sciences and humanities PhD). I am curious that is it necessarily to encourage innovation in those fields by policy implementation? If so, and how to design the policy?

3. Other related question about research funding and R&D subsides: I wonder whether the economic incentives would discourage innovations? or even corrupt the communism of scientific collaboration. For example, in order to obtain research funding, the competition of mainstream science would be fierce, and small-team scientific outputs could be neglected at the end of the day?

Thank you again for sharing the work and I look forward to the talk tomorrow!