Research
Abstract: I document several facts about contingent work: there is greater dispersion and larger changes in hours worked by contingent workers, and contingent workers' hourly wages are 11.5 percent lower than traditional employees'. I develop a novel model of how individuals and firms choose contingent work or traditional employment. Contingent work offers hours flexibility to individuals but traditional employment earns a higher wage in equilibrium and has the security of unemployment insurance. Firms hire traditional employees before observing their TFP and must pay administrative costs to hire or fire traditional employees. They can hire (less productive) contingent workers flexibly without these constraints. I show that the recent development of apps (such as Uber) that make contingent work easy to find lowered the optimal UI replacement rate from 48 percent to 41 percent, which shows that contingent work provides valuable insurance to all workers in the economy. I also analyze a recent policy change that extended UI to contingent workers. This policy generates welfare losses of 0.08 percent when the UI programs are funded by separate tax rates. Funding both UI programs together with a single tax generates welfare gains of 0.09 percent.
On the Nature of Entrepreneurship (PDF), with Anmol Bhandari, Thomas May, Ellen McGrattan, and Evan Schulz
Abstract: This paper elucidates the nature of entrepreneurship by comparing life-cycle income profiles and outcomes of individuals who share similar characteristics but differ in their choice of self- or paid-employment. Results are based on U.S. administrative data from the Internal Revenue Service and Social Security Administration over the period 2000-2015 for subgroups of the population differing by gender, marital status, education, occupation, industry, cohort, and employment status. Contrary to top-coded survey evidence based on relatively small samples and short panels, we find that entrepreneurs with at least twelve years in self-employment during our sample have significantly higher average income and steeper, more persistent income growth profiles than their paid-employed peers with similar characteristics. Contrary to survey evidence, we find that new entrants into self-employment have higher labor incomes and lower asset incomes prior to entry relative to similar peers that do not enter. We develop a theory of entrepreneurial choice and compare it to the subsample of young entrepreneurs in our data. We find that including firm-specific investment, risky incomes, and incomplete information is necessary for the theory to match the observed income growth profiles and switching behavior.
Abstract: Many developed countries provide housing subsidies to low-income renters. Recipients in the U.S. pay a fixed percentage of their income towards housing, and the subsidy covers the remaining cost. In other countries, the subsidy is instead calculated as a percentage of the contract rent. This paper documents evidence of search and matching frictions in the rental housing market and examines how these frictions impact the costs and benefits of income-based and rent-based housing subsidies. I develop a directed search model of the rental housing market and analyze the equilibrium effects of subsidies. Under rent-based subsidies, higher matching frictions increase costs for both the households and the subsidy provider. On the other hand, when subsidies are based on income, households bear most of the additional costs of increased matching frictions. In general, income-based subsidies distort households' search behavior more than when subsidies are rent-based.
Work in Progress
Working from Home and Human Capital Accumulation