Selected Work-in-Progress

New Employer Taxes and Entrepreneurship: Evidence from Unemployment Insurance,
with Audrey Guo

Working Papers

Entrepreneurial Spillovers and Minority Entrepreneurship

How do social connections affect the diversity of new business leaders? A growing literature has shown that entrepreneurs can inspire future entrepreneurship, and a natural place where these spillovers could facilitate new entrepreneurship by women and racial minorities is in the workplace, where people meet coworkers from different backgrounds. Using comprehensive data on millions of American workers across the economy, I find that while individuals are more likely in general to become entrepreneurs after working with coworkers who previously led young businesses, these spillovers predominantly occur within demographic groups, if at all, perpetuating low entrepreneurial diversity.

Supplementary Material and Media

Online appendix
Jordi Blanes i Vidal's The Visible Hand podcast
Matt Clancy's New Things Under the Sun #1 and #2

Within-Firm Pay Inequality and Productivity. [NBER #32240],
with Nicholas Bloom, Scott Ohlmacher, and Cristina Tello-Trillo

Combining confidential Census worker and firm data, we find three key results. First, employees at more productive firms earn higher pay at all earnings levels. Second, this pay-productivity relationship strengthens with seniority, doubling from an elasticity of 0.07 for pay on productivity for the median-paid employee to 0.15 for the top-paid employee. Consequently, more productive firms have higher within-firm inequality. Our data suggests this is driven by their greater adoption of aggressive performance-pay bonus and management schemes. Finally, the magnitude of this pay-performance slope suggests rising productivity can explain 40% of the rise in within-firm inequality since 1980.

Other Versions and Media

NBER working paper #29377
CES working paper
Harvard Law School Forum on Corporate Governance
Harvard Business Review

Are Immigrant Entrepreneurs Magnets for Foreign Investors?,
with Mahdi Eghbali and Livia Yi

Immigrant entrepreneurs play a vital role in the US startup landscape, yet how they affect the financing of US-based startups is not well understood. Using rich data on equity financing deals in the US, we identify three key findings. First, immigrant entrepreneurs are disproportionately financed in their early stages by investors based outside the US. Consistent with homophily, this pattern is mainly driven by immigrant entrepreneurs receiving equity financing from investors in their home countries and holds when leveraging within-founder variation in having immigrant co-founders. Second, these homophilic investments are not justified by better performance. Immigrant-founded startups financed by international investors are less likely to successfully exit than their native counterparts. Finally, through this homophily, immigrant-founded startups attract international capital to native entrepreneurs based in the same city, leading to regional financing spillovers. To mitigate potential confounding factors such as local economic trends, we employ a shift-share instrument. Taken together, these findings suggest that immigrant entrepreneurs contribute to the US startup ecosystem by serving as magnets for foreign investors.

Peer-Reviewed Publications

The Slow Diffusion of Earnings Inequality. [Official Link, PDF, NBER #30977], 2023, Journal of Labor Economics, 41(S1): S95-S127,
with Isaac Sorkin.

Over the last several decades, rising pay dispersion between firms accounts for the majority of the dramatic increase in earnings inequality in the United States. This paper shows that a distinct cross-cohort pattern drives this rise: newer cohorts of firms enter more dispersed and stay more dispersed throughout their lives. A similar cohort pattern drives a variety of other closely related facts: increases in worker sorting across firms on the basis of pay, education, and age, and increasing productivity dispersion across firms. We discuss two important implications. First, these cohort patterns suggest a link between changes in firm entry associated with the decline in business dynamism and the rise in earnings inequality. Second, cohort effects imply a slow diffusion of inequality: we expect inequality to continue to rise as older and more equal cohorts of firms are replaced by younger and more unequal cohorts. Back of the envelope calculations suggest that this momentum could be substantial with increases in between-firm inequality in the next two decades almost as large as in last two.


Bureau of Labor Statics' Beyond BLS Series

The Impact of Homelessness Prevention Programs on Homelessness, 2016, Science, 353(6300), 694-699,
with Bill Evans and Jim Sullivan

Despite the prevalence of temporary financial assistance programs for those facing imminent homelessness, there is little evidence of their impact. Using data from Chicago from 2010 to 2012 (n = 4448), we demonstrate that the volatile nature of funding availability leads to good-as-random variation in the allocation of resources to individuals seeking assistance. To estimate impacts, we compare families that call when funds are available with those who call when they are not. We find that those calling when funding is available are 76% less likely to enter a homeless shelter. The per-person cost of averting homelessness through financial assistance is estimated as $10,300 and would be much less with better targeting of benefits to lower-income callers. The estimated benefits, not including many health benefits, exceed $20,000.

Supplemental Material and Media

Materials and Methods Supplementary text
Data and Programs
Media coverage by the University of Notre Dame>, "What Would You Fight For?" series
Media coverage by Science Magazine
Media coverage by WGN Radio, Chicago

Previous Work