Working Papers

"Returns to Entrepreneurial Experience over the Business Cycle" (Job Market Paper)

In this paper, I investigate business-cycle related dynamics in returns to entrepreneurial experience. Using geographic variation in the severity and timing of the Great Recession, I disentangle the effects of declining potential profit and alternative employment options on differences in firm survival between serial and nascent entrepreneurs. Survival model estimates indicate that serial entrepreneurs perform better than nascent entrepreneurs when average income is lower, but they are more likely to exit when slack increases in the labor market. I find that these dynamics are driven by differences in both access to financial resources and business strategies.

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"Can Equity Crowdfunding Close the Gender Gap in Startup Finance?"

It is well documented that firms led by females do not obtain capital investment at the same rates as males. Equity crowdfunding, the process of financing a business with investment from a group of individuals over the internet, offers a solution to this problem by increasing firm access to investors. This fundraising process is not permitted in most parts of the world, but was recently legalized in the United States through the 2012 JOBS Act. In this study, I evaluate the effects of the legalization of accredited equity crowdfunding on startup financing in the United States. Using a novel dataset of startups and financing sources, I find that the entry of accredited equity crowdfunding and subsequent entry of unaccredited equity crowdfunding decreased the gender gap in entrepreneurial finance. I estimate that the gender gap in total funding to firms decreased by 7.9 percentage points after equity crowdfunding was legalized, decreasing the gap between total funding to male entrepreneurs and total funding to female entrepreneurs by 22%.

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Interview with the American Economic Association about the project.

"The Impact of Local Conditions during the Great Depression on Later in Life Investment Decisions"

A growing literature in economics explores the relationship between personal experiences with the business cycle and belief/preference formation. There exists substantial evidence using national variation in business cycles that personal experiences hold substantial weight in decision-making. However, the use of national aggregates limits researchers to the use of variation in decisions across birth-cohorts. Using state-level personal income for the majority of the 20th century, I investigate whether individual investment decisions are altered by sub-national economic fluctuations. Along with providing evidence that preferences/beliefs about investment begin to form in late childhood, my results suggest that children who grew up in states with lower average personal income invest less in risky assets throughout their lives, invest more in property, and are less likely to be self employed.

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Work in Progress

"The Value of Investor Managerial Involvement"

The objective of this research is to assess the value of managerial involvement by investors in entrepreneurial firms. Venture capitalists and angel investors invest and are actively involved in managing privately held entrepreneurial companies. However, a new form of financing, equity crowdfunding, provides similar levels of financing to angel investing, but investors typically do not take on an advisory role when making investments through crowdfunding. Crowdfunding has been lauded as a way to ``democratize finance,'' but it isn't clear whether this financing will provide as much benefit as traditional financing methods. Sorensen (2007) finds that investor influence has a significant impact on firms' likelihood to IPO, which leads to the question: Are crowdfunded firms worse off in the long run than firms financed through traditional means?

"Migration and the Civilian Conservation Corps" with Price Fishback (University of Arizona) and Shari Eli (University of Toronto)

This project will determine the long-run migration effects of the Civilian Conservation Corps, which was a New Deal employment program. In the program, young men were sent to camps away from their homes where they were trained to perform conservation work. In exchange for the work, they received meals, participated in educational programs, and sent money home to their relatives. This is the first research project to analyze an employment program involving relocation, and the results may be helpful for determining the value of similar modern programs.

The project also involves the large-scale collection of the CCC personnel records, which have previously been inaccessible due to privacy restrictions. The individual records provide valuable information of the lives of people in years when the national census was not taken, so that we can learn more about people’s lives during the heart of the Great Depression. The records provide data on CCC participants and their closest relatives (who received a stipend from the CCC).