Calendrier du 19 mai 2022
PEPES (Paris Empirical Political Economics) Working Group
Du 19/05/2022 de 17:00 à 18:30
On line
XU Guo (U. Berkeley joint with UPF)
Strengthening State Capacity: Postal Reform and Innovation during the Gilded Age
écrit avec with Abhay Aneja (UC Berkeley)
We use newly digitized records from the U.S. Post Office to study how strengthening state capacity affects public service delivery and innovation in over 2,800 cities between 1875–1905. Exploiting the gradual expansion of a major civil service reform, cities with a reformed postal office experience fewer errors in delivery, lower unit costs and an increase in mail handled per worker. This improvement goes with greater information flow, as measured by increased volumes of mail and newspapers. We observe more joint patenting involving inventors and businesses from different cities, suggesting that a more effective postal service contributed to innovation and growth during the Gilded Age.
Travail et économie publique externe
Du 19/05/2022 de 12:30 à 13:30
PSE- 48 boulevard Jourdan, 74014 Paris, salle R1-09
ZIDAR Owen (Princeton)
America's Missing Entrepreneurs
écrit avec Raj Chetty, John Van Reenen, and Eric Zwick
Joint with Macro
We use de-identified tax returns to characterize entrepreneurship across the American population since the late 1990s. Our longitudinal data permit an analysis of which new firms end up being highly successful, allowing us to distinguish startups that are destined to remain as small businesses from star job creators. We develop a novel measure of the returns to founding owners using a high-dimensional matching strategy, which tracks total income in the decade following entrepreneurial entry relative to that for a similar matched worker.
In the first part of the paper, we document new facts on the lifecycle of star entrepreneurs, including their family backgrounds, where they grew up, and their labor market trajectories prior to entry. Star entrepreneurs are disproportionately white, male, and drawn from high-income families. Entrepreneurship pays at the median and mean for those who choose to enter, though under-represented groups (URGs) consistently earn lower returns than their over-represented counterparts. Higher variance in entrepreneurial returns comes primarily through the outside option in the right tail of the earnings distribution.
In the second part of the paper, we develop three research designs to evaluate the role of alternative mechanisms that might account for different entry rates and returns for URGs. First, using a sample of early employees at highly successful startups, we estimate a substantial causal effect of liquid wealth on subsequent entry. However, liquidity appears insufficient to close entry gaps. Second, using local shocks to labor demand early in a person's career, we estimate the causal effect of experience in entrepreneurial industries on subsequent entry. Finally, using a movers research design, we find that children exposed to more entrepreneurs while they are growing up are more likely to start businesses themselves.
We use these multiple research designs to decompose the reduced form effects. For example, the effect of labor market experience can be separated into a direct effect and an effect operating through accumulated savings. Our results support the class of explanations that highlight "pipeline" factors as the key supply-side constraints on the number of star URG entrepreneurs. Such factors limit the number of potential entrepreneurs who might be responsive to later-stage interventions. For example, policies that target the point of entry, such as liquidity support or tax incentives, are unlikely to close entry gaps and narrow return differences.
Macroeconomics Seminar
Du 19/05/2022 de 12:30 à 13:30
PSE- 48 boulevard Jourdan, 75014 Paris, salle R1-09
ZIDAR Owen(Princeton)
VELDKAMP Laura(Columbia)
America's Missing Entrepreneurs
écrit avec Raj Chetty, John Van Reenen, and Eric Zwick
joint with Labor and Public Economics
We use de-identified tax returns to characterize entrepreneurship across the American population since the late 1990s. Our longitudinal data permit an analysis of which new firms end up being highly successful, allowing us to distinguish startups that are destined to remain as small businesses from star job creators. We develop a novel measure of the returns to founding owners using a high-dimensional matching strategy, which tracks total income in the decade following entrepreneurial entry relative to that for a similar matched worker.
In the first part of the paper, we document new facts on the lifecycle of star entrepreneurs, including their family backgrounds, where they grew up, and their labor market trajectories prior to entry. Star entrepreneurs are disproportionately white, male, and drawn from high-income families. Entrepreneurship pays at the median and mean for those who choose to enter, though under-represented groups (URGs) consistently earn lower returns than their over-represented counterparts. Higher variance in entrepreneurial returns comes primarily through the outside option in the right tail of the earnings distribution.
In the second part of the paper, we develop three research designs to evaluate the role of alternative mechanisms that might account for different entry rates and returns for URGs. First, using a sample of early employees at highly successful startups, we estimate a substantial causal effect of liquid wealth on subsequent entry. However, liquidity appears insufficient to close entry gaps. Second, using local shocks to labor demand early in a person's career, we estimate the causal effect of experience in entrepreneurial industries on subsequent entry. Finally, using a movers research design, we find that children exposed to more entrepreneurs while they are growing up are more likely to start businesses themselves.
We use these multiple research designs to decompose the reduced form effects. For example, the effect of labor market experience can be separated into a direct effect and an effect operating through accumulated savings. Our results support the class of explanations that highlight pipeline factors as the key supply-side constraints on the number of star URG entrepreneurs. Such factors limit the number of potential entrepreneurs who might be responsive to later-stage interventions. For example, policies that target the point of entry, such as liquidity support or tax incentives, are unlikely to close entry gaps and narrow return differences.
Behavior seminar
Du 19/05/2022 de 11:00 à 12:00
Salle R2.01
BELLET Clément (Erasmus School of Economics, Rotterdam)
Perceived Inequality and Preferences for Redistribution Among High Earners: Do Reference Groups Matter?
Understanding attitudes towards inequality among the “working rich” matters for any policy aimed at increasing the level of redistribution in society. We investigate this question using a unique sample of nearly 1,000 graduates from a highly ranked MBA program and a representative sample of Americans. We first show that high-earning MBAs are far more likely to know their rank in the income distribution. We then explore whether and how comparisons with peers or others (i.e. reference groups) shape their preferences for redistribution. Asking them to rank within their family, colleagues or classmates leads to an average 18% drop in the income share allocated to the richest 1% but has no discernible effect on their taxation preferences. We discuss the respective contribution of the comparative and normative functions of reference groups as potential mechanisms.