NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Effects of Scientists and Engineers on Productivity and Earnings at the Establishment Where They Work

Erling Barth, James C. Davis, Richard B. Freeman, Andrew J. Wang

Chapter in NBER book U.S. Engineering in a Global Economy (2018), Richard B. Freeman and Hal Salzman, editors (p. 167 - 191)
Conference held September 26-27, 2011
Published in April 2018 by University of Chicago Press
© 2018 by the National Bureau of Economic Research

This paper uses linked establishment-firm-employee data to examine the relationship between the scientists and engineers proportion (SEP) of employment, and productivity and labor earnings. We show that: (1) most scientists and engineers in industry are employed in establishments producing goods or services, and do not perform research and development (R&D); (2) productivity is higher in manufacturing establishments with higher SEP, and increases with increases in SEP; (3) employee earnings are higher in manufacturing establishments with higher SEP, and increase substantially for employees who move to establishments with higher SEP, but only modestly for employees within an establishment when SEP increases in the establishment. The results suggest that the work of scientists and engineers in goods and services producing establishments is an important pathway for increasing productivity and earnings, separate and distinct from the work of scientists and engineers who perform R&D.

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This chapter first appeared as NBER working paper w23484, The Effects of Scientists and Engineers on Productivity and Earnings at the Establishment Where They Work, Erling Barth, James C. Davis, Richard B. Freeman, Andrew J. Wang
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