Do Scientists Pay to Be Scientists?

This paper explores the relationship between wages and the scientific orientation of R&D organizations. Firms that adopt a science-oriented research approach (i.e., “science”) allow their researchers to pursue and publish an individual research agenda. The adoption of science may be associated with a “taste” for science on the part of researchers (a preference effect) and/or as a “ticket of admission” to gain earlier access to scientific discoveries with commercial application (a productivity effect). These two effects differ in their impact on wages. Whereas the preference effect contributes to a negative compensating differential, the productivity effect may result in rent sharing. However, because…