# Ufuk Akcigit, Harun Alp, Jeremy Pearce, and Marta Prato argue in Liberty Street Economics that education access supports productivity [Canonical reading](https://escapemeridian.com/readings/ufuk-akcigit-harun-alp-jeremy-pearce-and-marta-prato-argue-in-b24b8de9) Published January 5, 2026, Ufuk Akcigit, Harun Alp, Jeremy Pearce, and Marta Prato argue in Liberty Street Economics that a distinct minority of entrepreneurs—those who hire R&D workers—generate disproportionate productivity gains. Their data from Denmark show that college graduates are less likely to become entrepreneurs overall, but more likely to found transformative firms once they do. The authors’ quantitative model links these entrepreneurs’ demand for technical talent with the supply of R&D workers, treating them as interdependent parts of innovation and productivity growth. In the model, eliminating financial constraints in education access increases the shares of both groups and the pace of economic growth. The authors attribute part of the growth effect to increased demand for R&D workers from additional transformative entrepreneurs. They also report that, at low budgets, technical education subsidies generate greater initial returns than R&D or startup subsidies. These are simulations, not reported outcomes of implemented policies. The authors conclude that education subsidies can strengthen both sides of the innovation pipeline, and that ecosystems connecting company builders with idea builders matter for a thriving economy. Headline and summary by Escape Meridian, prepared by Luna from the attributed source. A source check is not independent confirmation of the source’s claims. ## Original source Federal Reserve Bank of New York · Article Original source date: Jan 5, 2026 (2026-01-05T12:00:00.000Z). Date basis: Date supplied by the publisher’s feed. Added to Escape Meridian: 2026-11-09T17:23:27.271Z. First observed: 2026-10-30T16:12:08.368Z. Retrieved: 2026-10-30T16:13:46.478Z. - [Which Entrepreneurs Boost Productivity?](https://libertystreeteconomics.newyorkfed.org/2026/01/which-entrepreneurs-boost-productivity/) ## Limits Text as retrieved on October 30, 2026; originally published January 5, 2026. The policy effects described are results of the authors’ quantitative model, not reported outcomes of implemented policies. The empirical data described are from Denmark; the post does not establish whether its findings generalize to other economies. ## Open question How would the model’s simulated effects compare with outcomes when education subsidies are implemented in practice? ## Source-stated The authors distinguish transformative entrepreneurs by whether they hire R&D workers, and argue this group generates disproportionate productivity gains. > a distinct minority are “transformative.” These individuals, who generate disproportionate productivity gains, tend to have high IQ scores, be well-educated, and hire technical (R&D) workers. - [Supporting source](https://libertystreeteconomics.newyorkfed.org/2026/01/which-entrepreneurs-boost-productivity/) ## Source-stated The authors report that college graduates are less likely to become entrepreneurs overall but more likely to found transformative firms once they do. > college graduates are less likely to become entrepreneurs overall but are much more likely to found transformative firms once they do. - [Supporting source](https://libertystreeteconomics.newyorkfed.org/2026/01/which-entrepreneurs-boost-productivity/) ## Source-stated In the authors’ model, eliminating financial constraints in education access raises the shares of R&D workers and transformative entrepreneurs and increases economic growth. > Eliminating financial constraints in education access, for example, increases R&D workers’ share of the workforce by 15 percent and boosts transformative entrepreneurs’ share by 7 percent, with both effects concentrated among high-ability individuals from low-income families. In addition, the pace - [Supporting source](https://libertystreeteconomics.newyorkfed.org/2026/01/which-entrepreneurs-boost-productivity/) ## Source-stated The authors report that, at low budgets, subsidies to technical education yield around four times the initial return of R&D and startup subsidies. > subsidies to technical education outperform R&D and startup subsidies, generating around four times as much initial return at low budgets - [Supporting source](https://libertystreeteconomics.newyorkfed.org/2026/01/which-entrepreneurs-boost-productivity/) ## Source-stated The authors conclude that education subsidies can support both the supply of R&D talent and the demand for it from innovation-focused entrepreneurs. > Education subsidies prove most effective because they simultaneously increase both the supply of R&D talent and demand for R&D talent from the pool of innovation-focused entrepreneurs. - [Supporting source](https://libertystreeteconomics.newyorkfed.org/2026/01/which-entrepreneurs-boost-productivity/) ## Source and contributor context Federal Reserve Bank of New York · Publisher The publisher is identified here. No individual author has been inferred. ## Source media Media retrieval status: unchecked. ## Terms and references Reference context selected by Escape Meridian; separate from source evidence. Entity mentions do not establish authorship, involvement or endorsement. ## Editorial provenance Version 1. Publication ID: 70e3ae9b-d9d9-9b3c-fce6-1b61245c1fdf. Prepared by openai/gpt-6-luna; grounding review by anthropic/claude-opus-5.5. Source check: passed by anthropic/claude-opus-5.5 on 2026-11-09T17:18:37.935Z. This checks fidelity to the source, not whether its claims are independently true. Editorial selection: accept; reasons: bridge\_admitted\_by\_model. Observation: e685b90186b37ebb9f7862e0dd163911370327178efb32e729920690a62fde20. Source text hash: 7fca37b94fbe330d592a269b8ad55a364f4f1d3510c24ac0292b0d20996192c0. ## Revision and source-check history ### Version 1 — 2026-11-09T17:23:27.271Z Published January 5, 2026, Ufuk Akcigit, Harun Alp, Jeremy Pearce, and Marta Prato argue in Liberty Street Economics that a distinct minority of entrepreneurs—those who hire R&D workers—generate disproportionate productivity gains. Their data from Denmark show that college graduates are less likely to become entrepreneurs overall, but more likely to found transformative firms once they do. The authors’ quantitative model links these entrepreneurs’ demand for technical talent with the supply of R&D workers, treating them as interdependent parts of innovation and productivity growth. In the model, eliminating financial constraints in education access increases the shares of both groups and the pace of economic growth. The authors attribute part of the growth effect to increased demand for R&D workers from additional transformative entrepreneurs. They also report that, at low budgets, technical education subsidies generate greater initial returns than R&D or startup subsidies. These are simulations, not reported outcomes of implemented policies. The authors conclude that education subsidies can strengthen both sides of the innovation pipeline, and that ecosystems connecting company builders with idea builders matter for a thriving economy. ## Original source Federal Reserve Bank of New York · Article Original source date: Jan 5, 2026 (2026-01-05T12:00:00.000Z). Date basis: Date supplied by the publisher’s feed. Added to Escape Meridian: 2026-11-09T17:23:27.271Z. First observed: 2026-10-30T16:12:08.368Z. Retrieved: 2026-10-30T16:13:46.478Z. - [Which Entrepreneurs Boost Productivity?](https://libertystreeteconomics.newyorkfed.org/2026/01/which-entrepreneurs-boost-productivity/) ## Limits Text as retrieved on October 30, 2026; originally published January 5, 2026. The policy effects described are results of the authors’ quantitative model, not reported outcomes of implemented policies. The empirical data described are from Denmark; the post does not establish whether its findings generalize to other economies. ## Open question How would the model’s simulated effects compare with outcomes when education subsidies are implemented in practice? ## Source-stated The authors distinguish transformative entrepreneurs by whether they hire R&D workers, and argue this group generates disproportionate productivity gains. > a distinct minority are “transformative.” These individuals, who generate disproportionate productivity gains, tend to have high IQ scores, be well-educated, and hire technical (R&D) workers. - [Supporting source](https://libertystreeteconomics.newyorkfed.org/2026/01/which-entrepreneurs-boost-productivity/) ## Source-stated The authors report that college graduates are less likely to become entrepreneurs overall but more likely to found transformative firms once they do. > college graduates are less likely to become entrepreneurs overall but are much more likely to found transformative firms once they do. - [Supporting source](https://libertystreeteconomics.newyorkfed.org/2026/01/which-entrepreneurs-boost-productivity/) ## Source-stated In the authors’ model, eliminating financial constraints in education access raises the shares of R&D workers and transformative entrepreneurs and increases economic growth. > Eliminating financial constraints in education access, for example, increases R&D workers’ share of the workforce by 15 percent and boosts transformative entrepreneurs’ share by 7 percent, with both effects concentrated among high-ability individuals from low-income families. In addition, the pace - [Supporting source](https://libertystreeteconomics.newyorkfed.org/2026/01/which-entrepreneurs-boost-productivity/) ## Source-stated The authors report that, at low budgets, subsidies to technical education yield around four times the initial return of R&D and startup subsidies. > subsidies to technical education outperform R&D and startup subsidies, generating around four times as much initial return at low budgets - [Supporting source](https://libertystreeteconomics.newyorkfed.org/2026/01/which-entrepreneurs-boost-productivity/) ## Source-stated The authors conclude that education subsidies can support both the supply of R&D talent and the demand for it from innovation-focused entrepreneurs. > Education subsidies prove most effective because they simultaneously increase both the supply of R&D talent and demand for R&D talent from the pool of innovation-focused entrepreneurs. - [Supporting source](https://libertystreeteconomics.newyorkfed.org/2026/01/which-entrepreneurs-boost-productivity/) ## Source and contributor context Federal Reserve Bank of New York · Publisher The publisher is identified here. No individual author has been inferred. ## Source media Media retrieval status: unchecked. ## Terms and references Reference context selected by Escape Meridian; separate from source evidence. Entity mentions do not establish authorship, involvement or endorsement. ## Editorial provenance Version 1. Publication ID: 70e3ae9b-d9d9-9b3c-fce6-1b61245c1fdf. Prepared by openai/gpt-6-luna; grounding review by anthropic/claude-opus-5.5. Source check: passed by anthropic/claude-opus-5.5 on 2026-11-09T17:18:37.935Z. This checks fidelity to the source, not whether its claims are independently true. Editorial selection: accept; reasons: bridge\_admitted\_by\_model. Observation: e685b90186b37ebb9f7862e0dd163911370327178efb32e729920690a62fde20. Source text hash: 7fca37b94fbe330d592a269b8ad55a364f4f1d3510c24ac0292b0d20996192c0. ### passed — 2026-11-09T17:18:37.935Z — anthropic/claude-opus-5.5 Publication: 70e3ae9b-d9d9-9b3c-fce6-1b61245c1fdf attribution — pass: The reading attributes the post to Ufuk Akcigit, Harun Alp, Jeremy Pearce, and Marta Prato in the New York Fed's Liberty Street Economics. This matches the byline and citation. Findings and conclusions are framed as the authors' arguments and model results. > Ufuk Akcigit, Harun Alp, Jeremy Pearce, and Marta Prato summary — pass: The reading explains 'transformative' entrepreneurs in plain terms as those who hire R&D workers. It covers the Danish data, the supply-and-demand link in the model, the education-subsidy simulations and the authors' conclusion. It clearly labels policy effects as simulations. The question follows from that gap without leading. Omitting the IQ findings and dropping 'much' from 'much more likely' do not distort the argument. > we distinguish transformative entrepreneurs, those who hire at least one R&D worker, from non-transformative entrepreneurs, who do not employ technical personnel date — pass: January 5, 2026 matches the post's dateline and evidence.originalPublished (UTC day). The evidence is a publisher page, not an archive copy. The reading does not use the later related-story links and uses no hindsight framing. > January 5, 2026 support — pass: Each claim matches the source text: who counts as transformative, the college-graduate pattern, and the model's education-constraint effects. The 40 percent demand-side share, the roughly fourfold return at low budgets, and the conclusion also match. The reading frames policy effects as simulated, not observed. The limitation that the data come from Denmark is accurate. > Supply-side changes alone generate only 60 percent of the total growth effect, with the remaining 40 percent stemming from increased demand for R&D workers by additional transformative entrepreneurs. media — pass: No media was selected, and no verified media candidates were supplied. That is consistent with the evidence. ## Recorded references Explicit citations in public readings and public file attachments to this reading. Shared topics are not citations. Other artifact types need an explicit reference adapter. No public references recorded here yet. [Reference data (JSON)](/readings/b24b8de93c6e29ed5cb6253c005e61a35f869b8f1d05af8de1d9b57ceebc2f15/references.json) ## Corrections and challenges [Send a correction or an opposing source](https://escapemeridian.com/corrections/) [JSON record](https://escapemeridian.com/readings/ufuk-akcigit-harun-alp-jeremy-pearce-and-marta-prato-argue-in-b24b8de9.json)