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Abstract: The United States has experienced a significant decline in firm entry rates and entrepreneurship since the 1980s. I document that this decline is more pronounced among married households and men, coinciding with changes in demographic composition (including the share of married households, skilled individuals, and marital sorting) and the rise in female labor force participation. To explore the relationship between demographic shifts and entrepreneurship, I develop a model of occupational choice that incorporates marital status, education, and gender. My findings suggest that changes in demographic composition account for 76% of the decline in entrepreneurship in the U.S.
"Taxes, Regulations and Business Structure in the US" (new draft coming soon)
joint with Gustavo Ventura
Abstract: Since the 1980s, the U.S. has seen a notable shift in business structure: the output share of pass-through entities (S-corporations, LLCs, partnerships, sole proprietorships) nearly doubled, while that of C-corporations declined. Over the same period, tax policies and avoidance behaviors also changed substantially. Using a dynamic growth model with occupation choice, entrepreneurial risk, and endogenous tax avoidance, we assess the extent to which these factors account for the output reallocation. We find that changes in taxation, borrowing capacity, and tax avoidance account for approximately 43 percent of the observed shift. The results imply that additional mechanisms are needed to fully account for the reallocation.
Abstract: This paper examines how executive compensation influences firm investment, intangible capital, and innovation by exploiting the elimination of performance-based pay deductibility under the 2017 U.S. Tax Cuts and Jobs Act. Using difference-in-differences and event-study designs, we show that firms more exposed to the shock significantly reduce R&D, intangible capital, capital expenditures, and patent applications, especially among growth-oriented and smaller firms. We trace these real effects to weaker incentives: high-exposure firms cut stock-based and non-equity incentive pay and experience declines in risk-taking incentives, and they shift toward safer financial policies with higher payouts, lower cash flow, and higher earnings per share.
"Part-time Penalties, Household Decisions, and the Gender Pay Gap" (draft coming soon)
joint with Terry Cheung and Siyu Shi
Abstract: We study how joint household decisions shape gender gaps in hours and wages. Using U.S. data from the American Community Survey and the American Time Use Survey, we document three empirical patterns. First, gender gaps in hours and wages depend on both spouses’ occupation types, with a pronounced asymmetry: conditional on own occupation, women work fewer hours and earn lower wages when their spouses are in high-skill occupations, while the corresponding spousal effect for men is weaker. Second, hourly wages are nonlinear in hours, so modest differences in hours translate into disproportionate differences in earnings. Third, increases in non-market time associated with family size operate primarily through childcare and are accompanied by reductions in female market hours. To interpret these facts, we develop a static household model in which couples jointly choose market hours, childcare time, and expenditures under occupation-specific nonlinear earnings schedules and progressive taxation. The model shows how the interaction of household specialization, income effects, and nonlinear returns to hours amplifies gender wage gaps. We use the model to evaluate family policy counterfactuals and to quantify the role of child-related time allocation in shaping observed gender differences in labor market outcomes. We find that eliminating nonlinear earnings and labor market differences reduces gender pay gap from 0.30 to 0.10.
Work in Progress
"Entrepreneurship, Inequality, and Redistribution" joint with Hakki Yazici
"Firm Types and Financial Structures" joint with Okan Akarsu and Emrehan Aktug.
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