Category Archives: 2018

Do startups pay less?

M. Diane Burton, Michael S. Dahl, and Olav Sorenson

We analyzed Danish registry data from 1991 to 2006 to determine how firm age and size influence wages. Unadjusted statistics suggest that smaller firms paid less than larger ones and that firm age had little or no bearing on wages. After adjusting for differences in the characteristics of employees hired by these firms, however, we observed both firm age and firm size effects. We found that larger firms paid more than smaller firms for observationally-equivalent individuals but, contrary to conventional wisdom, that younger firms paid more than older firms. The size effect, however, dominates the age effect. Thus, while the typical startup – being both young and small – paid less than a more established employer, the largest ones paid a wage premium.

Industrial and Labor Relations Review, 71(2018): 1179-1200.

Social networks and the geography of entrepreneurship

Print version of Prize Lecture for the Global Award for Entrepreneurship Research, 2018

Olav Sorenson

Social relationships play at least three important roles in entrepreneurship. They help to determine who sees entrepreneurship as an available and desirable career path. Entrepreneurs use their contacts to raise funds for and to recruit employees and partners to their ventures. Social relationships also influence where and when entrepreneurs want to spend their leisure time. Because of these factors, entrepreneurs tend to found their firms in the places that they live (and in the industries in which they have been employed). That, in turn, implies that industries will tend to become and remain concentrated in a small number of places, even when firms do not benefit from this clustering.

Small Business Economics, 51 (2018): 527-537 (OPEN ACCESS)

The gender gap in early career transitions in the life sciences

Marc Lerchenmueller and Olav Sorenson

We examined the extent to which and why early career transitions have led to women being underrepresented among faculty in the life sciences. We followed the careers of 6,336 scientists from the post-doctoral fellowship stage to becoming a principal investigator (PI) – a critical transition in the academic life sciences. Using a unique dataset that connects individuals’ National Institutes of Health funding histories to their publication records, we found that a large portion of the overall gender gap in the life sciences emerges from this transition. Women transition to being a PI at a 20% lower rate than men. Differences in “productivity” (publication records) can explain about 60% of this lower rate. The remaining differential in the rates appears to stem from gender differences in the returns to similar publication records, with women systematically receiving less credit for highly-cited research.

Research Policy, 47 (2018): 1007-1017 (OPEN ACCESS)

Innovation policy in a networked world

Olav Sorenson

Social relationships channel information, influence, and access to scarce resources. As a consequence, social networks—-the patterns of these relationships across the members of a community—-influence who comes up with important innovations, whether and how rapidly those innovations get adopted, and who has the ability to commercialize them. They therefore also affect the overall rate at which innovation occurs in the economy. This paper provides an introduction to and review of the research on social networks most relevant to innovation, with a particular focus on the earliest stages of the innovation process. It then discusses the likely consequences of a variety of policy interventions that could either reduce the importance of social relationships to innovation or alter the patterns of relationships in ways that might promote innovation.

Innovation Policy and the Economy, 18 (2018): 53-77

NBER Working Paper Preprint

Long-term analysis of sex differences in prestigious authorships in cardiovascular research supported by the National Institutes of Health

Carolin Lerchenmüller, Marc Lerchenmueller, and Olav Sorenson

This study examines gender differences in the relative rates of men versus of women being listed in the prestigious first and last author positions on papers, changes in those rates over time, and differences in those rates across groups of articles. The probability of a woman being the first author on an article has risen over time to the point where she has better odds than a man of earning that position. But this advantage only exists for articles in less prominent journals. Women still have lower odds of receiving first authorships in the most prestigious journals. Progress in the rates at which women appear in the last author position, moreover, appears to have stalled, with women being named to these positions at nearly half the rate of men.

Circulation,137 (2018): 880-882 (OPEN ACCESS)