Centre for Public Policy at IIMB hosts talk on ‘Intellectual Property Rights & Wage Inequality’ by Prof. Chirantan Chatterjee
The seventh lecture in the ‘Inequality Conversation’ series touches upon data and empirical challenges to measure wage inequality in India and the mental health implications of such inequality
20 JUNE, 2022: “From the Luddites, during the British Industrial Revolution, to recent labour market strife in digital platform markets, we are once again seeing what has been long recognized – that while innovation and technology adoption contribute to long run economic growth, they may also contribute significantly to rising income inequality,” said Prof. Chirantan Chatterjee, highlighting the ramifications of inequality on society while delivering the seventh lecture in the ‘Inequality Conversations’ series, hosted by the Centre for Public Policy (CPP), at Indian Institute of Management Bangalore (IIMB), today.
Building on insights from his recent research, Prof. Chatterjee’s talk documented how a change in the patent regime in India as a quasi-natural experiment impacted wage inequality between managerial and non-managerial workers in the Indian manufacturing sector.
On the subject of technology-labour substitution, he specifically explored the intellectual property channel, and said it was surprising that there was hardly any research/evidence from the developing world on IP and wage inequality. Prof. Chatterjee then provided evidence, from his research, that stronger intellectual property protection has a sharper impact on the demand for managerial skill for technologically advanced firms, highlighting both within and between firm inequality. “This effect also exhibits a snail-shape being more pertinent not for superstar firms but for middle-quartile firms among technology leaders in the manufacturing sector,” he said.
“There is a trade-off between access today and innovation tomorrow but we have missed the trade-off around wage inequality,” he remarked, adding that policy makers must address this through universal basic income schemes, robot tax etc as more countries run the technology race.
He also touched upon data challenges to measure wage inequality in the country and discussed potential extensions of the study, thought experiment on normative public policy implications and lessons for LMIC countries using the findings from the paper Bhattacharya, S, Chakraborty, P and Chatterjee, C. (2022). Intellectual Property Regimes and Wage Inequality, Journal of Development Economics. Policy Note: Intellectual property rights and wage inequality | VOX, CEPR Policy Portal (voxeu.org).
“While there are employer-employee data sets available in Brazil and some Scandinavian countries, there are data and empirical challenges in India. The other option, in the Indian context, is in the online space,” he said, adding that when people feel that they are being left behind, there is an impact on their mental health. “There are mental health implications of wage inequality and that’s an important space that we as researchers want to get into.”
Prof. Chirantan Chatterjee lauded the Centre for Public Policy at IIMB for launching the ‘Inequality Conversations’. Earlier in the evening, Prof. Arpit Shah, faculty member at the Centre for Public Policy, introduced Prof. Chirantan Chatterjee.
Chirantan Chatterjee is a tenured Reader in Economics of Innovation at the Science Policy Research Unit (SPRU), University of Sussex where he is also Co-Director of Policy Training and Executive Education. Over the last decade, his research has been published in several top peer reviewed journals like Management Science, The Rand Journal of Economics, Research Policy, Production and Operations Management, Journal of Development Economics, Journal of Health Economics, Social Science and Medicine, Strategy Science and Journal of Business Ethics among others.
He recently co-edited a book Flattening the Curve, which teases out lessons from COVID-19 and grand challenges for health, innovation and the economy. In the past, Chatterjee has also consulted for the United Nations, World Bank and the World Health Organization on global health and public policy.
He holds a PhD & MPhil from Carnegie Mellon University in public policy and management, a B. Tech in Civil Engineering from Indian Institute of Technology, Roorkee & a MBA from Indian Institute of Management, Calcutta. He has been a former full-time faculty member of IIM Bangalore, Indian School of Business, and IIM Ahmedabad.
Watch here: https://youtu.be/cRUX9FoIIWM