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.


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

Abstract. Increasing competition between firms is not a Pareto-improving policy. Increasing competition redistributes income from the owners of firms to workers. This redistribution occurs through higher wages and lower asset prices. We use microdata from the Survey of Consumer Finances to empirically construct the gains and losses to households from increasing competition. We classify a household as in favor of competition if their gains from higher wages are larger than the loss on their portfolio of corporate securities. Nearly all young households favor increasing competition. The fraction of households in favor of competition declines with age. High labor income households accumulate corporate securities at a much higher rate than low labor income households and as a result they oppose competition from a younger age. A large majority of households favor increasing competition. Despite being a minority, households that oppose increasing competition own the vast majority of resources in the economy.

Value without Employment (with Stavros Panageas) [Early Draft, Early Slides]

While young firms' contribution to aggregate employment has been underwhelming over the past decades, a similar trend is not apparent in their contribution to aggregate sales and aggregate stock market capitalization. We provide evidence that the weak job creation by young firms coincided with an increase in the ratio of firm-value-to-employment and sales-to-employment for these firms. The weak job creation suggests that recent firm cohorts have faced a comparatively lower marginal product of labor (for a fixed unit of labor) compared to their predecessors, while the higher firm value-to-employment ratios suggest a higher average product of labor. Motivated by these facts, we study the implications of the arrival of "high average / low marginal'' product-of-labor firms in a stylized model of dynamic firm heterogeneity, and show that the model can account for a large number of facts related to the decline in "business dynamism''. While accounting for the decline in business dynamism, the model also shows that aggregate output and productivity may remain unaffected by the decline in dynamism.

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

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.

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

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.


Does Antitrust Enforcement Affect Competition? (with Tania Babina, Jessica Jeffers, Ezra Karger, and Ekaterina Volkova)

This project is support by a grant from the Washington Center for Equitable Growth and U.S. Census Bureau External Project #2090 [Link]

This project will construct a comprehensive database of U.S. antitrust enforcement actions against firms and individuals between 1890 and 2017. The goal is to measure the effect of antitrust enforcement on firm and industry level outcomes. To achieve that goal, the authors will link this database to industry-level economic outcomes and to restricted firm-level tax records from the IRS and the U.S. Census Bureau, including the Economic Census, the Longitudinal Business Database, and the Standard Statistical Establishment List.

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

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