Academic Entrepreneurship and Inequality: Evidence From Administrative Data

Abstract

Over the past several decades, universities have increasingly emphasized knowledge and technology transfer. Faculty are key agents facilitating this transfer, engaging in commercial and entrepreneurial activities such as, consulting, student placement, patenting, and the founding of start-ups. This paper documents the prevalence of faculty commercial engagement as well as the extent to which it widens earnings inequality among faculty. In contrast to previous work that uses surveys with low response rates to measure the commercial engagement of university faculty, this paper uses detailed administrative data from universities (UMETRICS) linked to confidential earnings data at the Internal Revenue Service (IRS) and U.S. Census Bureau (including the universe of W2 and 1099 tax records) to analyse how often university faculty engage in the types of commercial and entrepreneurial activity that catalyse knowledge/technology transfer.