2013 Reports

Career Choice and Economic Innovation: A Comparison Between China, Germany and the USA

Bojilov, Raicho; Phelps, Edmund S.

This paper investigates some individual career choices in China, Germany and the US that have an impact on economic innovation. It presents evidence that public administration in China attracts highly educated and talented people, while those who create firms tend to have low educational attainment and do not stand out in terms of talent. In contrast, Americans of high ability tend to go in the private sector either as employees or as entrepreneurs. While education generates attractive alternatives to creating one's own firm, educated American entrepreneurs are highly successful, suggesting that they engage in frontier innovation. We then discuss some policy recommendations that may help increase the attractiveness of creating one’s own firm in China.