I am an Assistant Professor of Finance at Boston College and a Junior Fellow at the George J. Stigler Center for the Study of the Economy and the State at the University of Chicago Booth School of Business. 


Declining Labor and Capital Shares [Link, Internet Appendix, SSRN Version] Journal of Finance, 75(5): 2421-2463, 2020

Abstract. This paper presents direct measures of capital costs, equal to the product of the required rate of return on capital and the value of the capital stock. The capital share, equal to the ratio of capital costs and gross value added, does not offset the decline in the labor share. Instead, a large increase in the share of pure profits offsets declines in the shares of both labor and capital. Industry data show that increases in concentration are associated with declines in the labor share.


Value without Employment (with Stavros Panageas)  [Link, Slides, NBER Working Paper

Revise and resubmit, Journal of Finance

Abstract. Young firms' contribution to aggregate employment has been underwhelming. However, we show that a similar trend is not apparent in their contribution to aggregate sales or stock-market capitalization, implying that these firms have exhibited a high ratio of average-to-marginal revenue-product-of-labor. We study the implications of a gradual shift in the average-to-marginal revenue-product-of-labor within a model of dynamic firm heterogeneity. We show that this shift provides a) a unified explanation for several facts related to the decline in ``business dynamism'', and b) a possible explanation for why large declines in young-firm employment can have only a moderate effect on aggregate output.

Antitrust Enforcement Increases Economic Activity (with Tania Babina, Jessica Jeffers, Ezra Karger, and Ekaterina Volkova)  [SSRN Version]

We hand-collect and standardize information describing all 3,055 antitrust lawsuits brought by the Department of Justice (DOJ) between 1971 and 2018. Using restricted establishment-level microdata from the U.S. Census, we compare the economic outcomes of a non-tradable industry in states targeted by DOJ antitrust lawsuits to outcomes of the same industry in other states that were not targeted. We document that DOJ antitrust enforcement actions permanently increase employment by 5.4% and business formation by 4.1%. Using an event-study design, we find (1) a sharp increase in payroll that exceeds the increase in employment, meaning that DOJ antitrust enforcement increases average wages, (2) an economically smaller increase in sales that is statistically insignificant, and (3) a precise increase in the labor share. While we cannot separately measure the quantity and price of output, the increase in production inputs (employment), together with a proportionally smaller increase in sales, strongly suggests that these DOJ antitrust enforcement actions increase the quantity of output and simultaneously decrease the price of output. Our results show that government antitrust enforcement leads to persistently higher levels of economic activity in targeted industries.

Who's in Favor of Competition? (with José Azar) [Link]

Abstract. We study and classify households whose interests as owners of corporations exceed their interests as workers and consumers and we refer to these households as Capitalists. As households age, they increase their interests as owners (through the acquisitions of corporate assets) and reduce their interest as workers (as they have fewer years left in the labor force). We find that Capitalists make up 30% of the population, earn close to half of all income, and own nearly 80% of the wealth. While they are a minority of the population, Capitalists are far more engaged in the political process and make up a majority of political contributions. Relative to the Forbes 400, we find that the households that we classify as Capitalists are far larger in number, wealth, and political importance. 

Low Wages Aren't a Growing Problem (with David Abraham) [Link, SSRN Version]

Abstract. Statements by high-profile political figures and supporting academic research have led to a common perception of worsening job prospects for low-wage workers in the US. In this paper, we show that since the early 1980s there has been a decline in the share of workers earning low wages. This holds across sub-populations and across thresholds for determining what constitutes a low wage. Much of the decline occurs over two periods: the late 1990s and the late 2010s. The decline is greater and steadier for women than for men. We further show that the worker-level persistence of low wages has not increased, and has likely decreased, over time. 

The Decline of the Labor Share is not Explained by the Capitalization of Intellectual Property Products [Link]

Abstract. The U.S. labor share has clearly been declining since the early 1980s. This does not depend on whether or not we capitalize intellectual property products. Koh, Santaeulàlia-Llopis and Zheng (2020) approximate the labor share by a single linear time trend over the entire period of 1929--2019. This period includes a long period of time over which the labor share is known to be mostly stable and a shorter period of time over which the labor share is known to decline. Once we separate out the period starting in the 1980s we recover the decline in the labor share. 

Classifying Industries into Tradable/Nontradable via Geographic Radius Serve (with Ezra Karger) [SSRN Version]

Abstract. We present a complete classification of six-digit North American Industry Classification System (NAICS) industries into tradable and non-tradable. Those industries that have establishments located in close proximity to a large fraction of the population are classified as non-tradable. The results of our classification of six-digit NAICS industries into tradable and non-tradable are available in CSV format from the authors upon request. 


M&A and the Rise of Concentration (with Ezra Karger and Scott Loring)

This project is supported by the U.S. Census Bureau External Project #2090 


70 Years of US Corporate Profits (with Seth G. Benzell) [Link]

Abstract. We extend Barkai (2016) and measure capital costs and profits over the period 1946--2015. The profit share is declining from 1946 to the early 1980s and has been increasing since. As a share of gross value added, profits today are higher than they were in 1984, but lower than their value in the years after World War II. Alternative measures of profits show similar trends. We provide evidence that the measured time trends of profits are not mechanically related to interest rates.