Stock Market Wealth and Entrepreneurship [Revise and Resubmit at Review of Economic Studies]
(with Gabriel Chodorow-Reich, Plamen Nenov, and Alp Simsek) [pdf]
We use detailed data on stock portfolios of Norwegian households to show that stock market wealth increases entrepreneurship activity. Our research design isolates idiosyncratic, quasi-random variation in stock market returns. An increase in stock market wealth increases the propensity to start a firm, with the response concentrated in households with moderate levels of financial wealth, for whom a 20 percent increase in stock wealth increases the likelihood to start a firm by about 20%, and in years when the aggregate stock market return in Norway is high. We develop a method to study the effect of wealth on firm outcomes that corrects for the bias introduced by selection into entrepreneurship. An increase in stock market wealth also has a causal effect on initial firm size and profitability. The pass-through from stock wealth into equity in the new firm is one-for-one, indicating that higher stock market wealth relaxes would-be entrepreneurs' financial constraints.
Strike gold, land a dream job? Stock Market Windfalls, Job Mobility and Job Preferences. (Job Market Paper)
Using detailed data on stock portfolios of Norwegian workers I investigate the interactions between stock market wealth and both job mobility and choices. Employing a research design isolating idiosyncratic, quasi-random variation in stock market portfolio returns, I find evidence of higher stock market wealth to increase job transition rates for moderate wealth workers and to decrease mobility for high wealth workers. Conditional on changing employers, moderate wealth workers choose higher paying jobs while wealthy workers move to lower pay jobs. I show these results to be consistent with a model where initial wealth interacts with preferences for wage and non-wage income.
Assortative mating preferences and intra-household specialization of same and opposite-sex couples
Wealth and Retirement : Stock Market Wealth and the Labor Supply of Elderly Workers