Jessica Bai

Research

Venture Capital Cycles and the Startup Labor Market

• Awards: 

  • The Brattle Group Ph.D. Candidate Award for Outstanding Research 2025

  • SFS Cavalcade North America Ph.D. Student Grant 2025

• I show that venture capital market shocks have real consequences for high-skill knowledge workers. Plausibly exogenous shocks to local VC increase local startup hiring but also increase startup labor turnover. Startup jobs created in hotter VC markets are shorter-lived, and workers in these jobs are more likely to leave the universe of VC-backed firms within two years. While job duration in hot markets falls across occupations, effects on career advancement differ by role: STEM workers who enter booming VC markets advance slower in seniority in the following two to five years, while Business workers are less affected. I show that differences in technology-skill specificity across occupations can explain this heterogeneity. The results indicate that shocks to risk capital can have lasting effects on knowledge worker careers.

Healthcare Provider Bankruptcies (with Samuel Antill, Ashvin Gandhi, and Adrienne Sabety) [NBER Working Paper No. 33763] [AEA RCT Registry]

• Healthcare firms are filing for Chapter 11 bankruptcy at record rates. We find that bankruptcies increase healthcare staff turnover, worsen care, and harm patients. Using a difference-in- differences design, we estimate that a bankruptcy filing immediately increases staff turnover and worsens the firm’s performance on unannounced inspections. Next, using a patient- distance-to-facility instrument, we document that bankruptcies harm patients through increases in hospitalizations, physical restraints, and bedsores. Finally, we employ a randomized survey experiment of nursing home staff to confirm that bankruptcy filings increase voluntary departures and that replacement workers harm patients. 

Segmented Going-Public Markets and the Demand for SPACs (with Angela Ma and Miles Zheng)

• Awards: WFA Ph.D. Candidate Award for Outstanding Research 2021

• Mentioned by: SEC's 2022 Proposed Rule on SPACs (No. S7-13-22)

• Featured in: Private Equity Findings, Issue 18

• We provide a regulatory-arbitrage-based explanation for the origin and proliferation of the Special Purpose Acquisition Company (SPAC). SPAC sponsors act as non-bank intermediaries, and the SPAC market structure appeals to yield-seeking investors and riskier, high-growth issuers overlooked by downside-averse bank underwriters. Data from 2003-2020 support these predictions. SPAC firms are smaller, younger, and riskier than traditional IPO firms but grow revenue at higher rates after going public. Equity market investor sentiment strongly predicts SPAC capital raises relative to traditional IPOs. Finally, a difference-in-differences analysis shows that an increase in IPO litigation risk generates a shift towards SPACs.

The Dance Between Government and Private Investors: Public Entrepreneurial Finance around the Globe (with Shai Bernstein, Abhishek Dev, and Josh Lerner) [NBER Working Paper No. 28744]

• This paper examines the interaction between governments and private capital investors when financing early-stage ventures. We first provide a simple conceptual framework to explore when collaboration between governments and private investors is likely to emerge. Using hand-collected data on 755 programs worldwide, we find that government programs frequently involve private capital investors. Collaboration is greater when governments are more effective, when programs target earlier-stage companies, and when the local private venture market is more developed. Such collaborations mostly occur through joint equity investments and matching-funds requirements. These findings underscore the importance of government synergies with local private capital markets.