The Politics of Region-Biased Technological Change

• In Event: Regional Inequality in the Knowledge Economy in Europe and North America

Abstract

The transition to the knowledge economy has been associated with a strong urban bias and rising regional inequality, which are explained by the co-location decisions of knowledge-intensive businesses (KIBs) and highly-educated workers. Yet, the geographical concentration of KIBs and skilled workers is far from uniform across countries. We explain this variation as a result of public policies responding to institutionally-mediated political coalitions. We show that the concentration of innovation, measured by geocoded patent applications, is closely linked to differences in political institutions. Using a (quasi) diff-in-diff design, we intend to show that the effects of technological shocks on inequality are conditional on differences in expected coalitions.

Authors

• Caterina Chiopris, Harvard University

• Torben Iversen, Harvard University

• David Soskice, Oxford University