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Martin Watzinger Dissertation Sample

The Allocation of Talent Over the Business Cycle and its Long‐Term Effect on Sectoral Productivity

20 PagesPosted: 15 Oct 2015  

There are 2 versions of this paper

Date Written: October 2015


It is well documented that graduates enter different occupations in recessions than in booms. In our paper, we examine the impact of the resulting change in the allocation of talent for long‐term productivity and output in a sector. In a setting where output can be quantitatively and qualitatively measured, we find evidence that talent flows to stable sectors in recessions and to cyclical sectors in booms: economists starting or graduating from their PhD in a recession are significantly more productive in academia over the long term than economists starting or graduating in a boom.

Suggested Citation:Suggested Citation

Böhm, Michael J. and Watzinger, Martin, The Allocation of Talent Over the Business Cycle and its Long‐Term Effect on Sectoral Productivity (October 2015). Economica, Vol. 82, Issue 328, pp. 892-911, 2015. Available at SSRN: https://ssrn.com/abstract=2674322 or http://dx.doi.org/10.1111/ecca.12143

Purchase - $38.00

Assistant Professor at the Economics Department of the University of Munich

Research Papers

How antitrust can spur innovation: Bell Labs and the 1956 consent decree

The Employment Effects of Countercyclical Infrastructure Investments

with Lukas Buchheim, LMU Munich

Measuring Spillovers of Venture Capital

with Monika Schnitzer, LMU Munich

Disclosure and Cumulative Innovation:
Evidence from the Patent Depository Library Program​

with Jeff Furman, Boston University and Markus Nagler, LMU
Is compulsory licensing an effective antitrust remedy to increase innovation? To answer this question, we analyze the 1956 consent decree which settled an antitrust lawsuit against Bell, a vertically integrated monopolist charged with foreclosing the telecommunications equipment market. Bell was forced to license all its existing patents royalty-free, including those not related to telecommunications. We show that this led to a long-lasting increase in innovation but only in markets outside the telecommunications industry. Within telecommunications, where Bell continued to exclude competitors, we find no effect. Compulsory licensing is an effective antitrust remedy only if incumbents cannot foreclose the product markets.
We estimate the causal impact of a sizable German infrastructure investment program on employment at the county level. The program focused on improving the energy efficiency of school buildings, making it possible to use the number of schools as an instrument for investments. We find that the program was effective, creating one job for one year for each €25’000 of investments. The employment gains reached their peak after nine months and dropped to zero quickly after the program’s completion. The reductions in unemployment amounted to two-thirds of the job creation, and employment grew predominately in the construction and non-tradable industries.
We provide the first measurement of knowledge spillovers from venture capital-financed companies onto the patenting activities of other companies. On average, these spillovers are nine times larger than those generated by the R&D investment of established companies. Spillover effects are larger in complex product industries than in discrete product industries. Start-ups with experienced inventors holding a patent at the time of receiving the first round of investment produce the largest spillovers, indicating that venture capital fosters the commercialization of technologies. Methodologically, we contribute by developing a novel definition of the spillover pool, combining citation-based and technological proximity-based approaches.
How important is access to patented prior art for innovation? We study this question using variation from the expansion of the USPTO Patent Depository Library Program starting in 1977. Patent libraries facilitate access to prior art by making all U.S. patents available in a geographical region and help in the search for relevant prior art. We find that after a library opens, local patenting increases by 19% relative to a control group of regions with a Federal Depository Library. The effect is concentrated in young companies and inventors start to cite more distant and more technologically diverse prior art.

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