Essays on Academic Innovation & Labour Markets

Academic productivity is an area of study for those who research the economics of innovation. However, understanding of its determinants is still sparse. This thesis aims to broaden current understanding of the factors of production that go into academic innovation as well as how changes in academic trends may influence the careers of researchers. In doing so, this thesis examines productivity and career consequences of academic innovation across departmental and individual levels. More specifically, the first chapter of this thesis examines productivity in regards to a paradigm shift at the departmental level. The second chapter examines productivity at the individual economist level in relation to United States federal government funding. The third chapter uses the before mentioned scientific revolution to examine how changing trends may impact career prospects of junior faculty, and whether or not tenured faculty are biased towards their own methods. The first chapter of this thesis examines how academic productivity can be influenced by funding and changing trends in economics. In this chapter, I use the Credibility Revolution mentioned in Angrist & Pischke (2010) to examine how the change in economics from being primarily theory based to being an empirical field has affected not only labour markets, but also effects of spending on different types of papers. Much of this work is accomplished with the aid of machine learning techniques in order to label the large amounts of data necessary for this sort of analysis. The main findings of this thesis are that increased spending at the university level does not lead to the production of more microeconometrics papers, nor does increased expenditure seem to lead to increased impact as measured by citations received, but rather seems to decrease the number of publications as well as citations received. The first chapter also finds that private universities seem to be affected most negatively by increasing expenditures. I also find that there is little difference in the spending efficacy of elite and non-elite universities. In the second chapter, this thesis examines the impact of National Science Foundation Grants on the productivity of academic economists. I find that the receipt of the first grant has a positive effect on the number of citations received for economists as well as a positive effect on the number of unique co-authors one has throughout their career. However, receipt of a first grant does not cause economists to have more publications, more highly influential publications, or take on more projects. This effect is stronger for empiricists, but less precisely measured. There is also no statistically significant effect of subsequent grants, simply having a grant, or the amount of grant money available. This indicates that the effect of receiving a grant has more to do with network effects or as a signaling mechanism than truly increasing productivity of recipients. In the third chapter I examine how changing trends in economics has impacted labour markets for academic economists. My findings indicate that conditional on additional measures of academic productivity such as the number of top 5 publications or citations, empirical economists - whether they are microeconometricians or other types of empiricists have a greater probability of tenure than do other economists. I also find that this effect is strongest in mid-ranked universities rather than top or lower ranked universities which may indicate that middle ranked universities are more likely to engage in strategic behaviour. I find no indication that more empiricists in tenured positions has any effect on an empiricist’s probability of receiving tenure. This provides some evidence that faculty are aware of trends and seem to make hiring decisions based on them, but do not have any personal bias towards their own style of research by interacting the number of tenured empiricists with whether or not the economist is an empiricist as well. Finally, I find that microeconometricians on average have a hazard to tenure approximately 25% higher than other economists. This chapter provides evidence that changing trends can impact the careers of younger researchers, and also that tenured faculty do not try to stack departments with people who do similar work as them. This thesis contributes to current economic understanding of innovation, and how innovation can affect labour markets. The first chapter expands understanding of departmental spending and how it contributes to innovation. Specifically, it looks at whether or not spending improves the quantity or quality of papers related to a scientific revolution. The findings themselves provide evidence that spending is negatively related to production and quality of papers related to scientific revolutions. The second chapter takes a closer view and looks at how personal funding for basic research through National Science Foundation (NSF) grants impacts the quality and quantity of papers economists produce. The findings here indicate that NSF grants produce a network effect more so than improving the productivity of economists. The third chapter contributes to understanding of labour markets. In relation to the scientific revolution mentioned prior, this chapter looks at whether or not this impacts the probability of junior economists receiving tenure based on whether or not they are currently doing fashionable work, the findings indicate that changing tastes in academia can influence career outcomes regardless of one’s own performance, and provides some evidence that tenured faculty do not seem to have bias for others doing the same type of research.