The Education-Innovation Gap
SeriesErasmus Finance Seminars
Speaker(s)Song Ma (Yale University, United States)
LocationErasmus University, Polak Building, Room 3-14
Date and time
November 05, 2019
15:30 - 16:45
Education plays a key role in the production of human capital by equipping individuals with up-to-date knowledge and skills. What is the distance between the content of higher education and the frontier of knowledge? How does it vary across schools and students' background? How does it relate to students' economic outcomes? This paper answers this question with a new measure: the ``education-innovation gap,'' defined as the distance between the material taught in college and university courses and the content of frontier research, patents, and employment postings. Using information on the text of three million syllabi across US institutions between 1992 and 2018, we calculate this gap as the ratio between the textual similarity of each syllabus with old and new academic publications, patents, and job ads. Armed with this new measure, we document three facts. First, the gap varies considerably within field, and it has steadily increased over time since 2000. Second, significant differences exist across schools serving different populations of students: The gap is smallest for Ivy-League and elite schools and for schools enrolling children of affluent parents, and largest for schools with the largest proportion of minority students. Third, the gap is negatively correlated with student outcomes such as graduation rates, income, and rates of intergenerational mobility, especially for students in lower-tiered universities. This evidence suggests that the ``education-innovation gap'' is a useful dimension to examine for human capital accumulation, labor market success, innovation, and inequality.