Atsushi Ohyama

Industry or Academia, Basic or Applied? Career Choices and Earnings Trajectories of Scientists

We extend life cycle models of human capital investments by incorporating matching theory to examine the sorting pattern of heterogeneous scientists into different career trajectories. We link differences in physical capital investments and complementarities between basic and applied scientists across industry and academic settings to individual differences in scientist ability and preferences to predict an equilibrium matching of scientists to careers and to their earnings evolution. Our empirical analysis, using the National Science Foundations Scientists and Engineers Statistical Data System database, is consistent with theoretical predictions of i sorting by ability into basic versus applied science among academic scientists, but not among industry scientists; and ii sorting by higher taste for nonmonetary returns into academia over industry. The evolution of an earnings profile is consistent with these sorting patterns: the earnings trajectories of basic and applied scientists are distinct from each other in academia but are similar in industry. This paper was accepted by Lee Fleming, entrepreneurship and innovation.

High-Tech Entrepreneurship

Whereas most start-ups are in low-tech industries, we apply a novel strategy to a data set of scientists and engineers to focus predominantly on high-tech entrepreneurs. We develop a simple model in which the rewards from entrepreneurship are determined by the interaction of ability, the quality of the entrepreneurial idea, and experience in employment. As is consistent with the model, we find that the average return to entrepreneurship is positive, higher paid workers are more likely to become entrepreneurs, especially at younger ages, and greater pre-entry labor market experience is associated with longer tenure but lower earnings in entrepreneurship.

An Economic Evaluation of the Renewable Fuel Standard (RFS) Biofuel Program: An Industrial Policy Approach

The American public realizes the growing scarcity of petroleum and the desirability of the development of alternative fuels. In 2005 and 2007, the U.S. Congress passed laws that aim to promote the consumption of renewable biofuels. The Environmental Protection Agency then designed the Renewable Fuel Standard Program (RFS) that mandates a certain volume of renewable biofuel consumption over the period of 2006-2022. The current policy discussions and analyses regarding the RFS have focused heavily on environmental issues, but we know very little about the U.S. ethanol industry itself. In this study, we examine the potential impact of the RFS on the development process of the U.S. ethanol industry from the viewpoint of industrial policy using ethanol plant-level data. Our analysis suggests that the RFS program contributes to increasing economies of scale and improving competition level among existing firms. The successful development of the U.S. ethanol industry hinges on this factor. The ethanol market is expanding through new plant construction, and the increased competition will let ethanol emerge as a viable fuel alternative to conventional fossil fuel.

Student Loans and Early Post-Graduation Earnings: Evidence from Decomposition Analysis

Student loans increase educational opportunities for students from all backgrounds. They have also been criticized as imposing financial and psychological hardships. We employ the data from restricted-use National Surveys of Recent College Graduates to conduct an in-depth investigation of the relationship between student loans and post-graduation labor market outcomes. Graduates with loans have systematically lower earnings than graduates without loans. Decomposition estimations show that most of the earnings differential is due to factors related to the choice and performance in college and unobservables. Student borrowers could benefit from more information about net returns to higher quality education conditional on borrowing.