1. Launching with a Parachute: The Gig Economy and New Business Formation, with John Barrios and Yael Hochberg, NBER Working Paper No. 27183
The introduction of the gig economy creates opportunities for would-be entrepreneurs to supplement their income in downside states of the world and provides insurance in the form of an income fallback in the event of failure. We present a conceptual framework supporting the notion that the gig economy may serve as an income supplement and as insurance against entrepreneurial-related income volatility, and utilize the arrival of the on-demand, platform-enabled gig economy in the form of the staggered rollout of ridehailing in U.S. cities to examine the effect of the arrival of the gig economy on new business formation. The introduction of gig opportunities is associated with an increase of ~5% in the number of new business registrations in the local area, and a correspondingly-sized increase in small business lending to newly registered businesses. Internet searches for entrepreneurship-related keywords increase ~7%, lending further credence to the predictions of our conceptual framework. Both the income supplement and insurance channels are empirically supported: the increase in entry is larger in regions with lower average income and higher credit constraints, as well as in locations with higher ex-ante economic uncertainty regarding future wage levels and wage growth.
2. Aging and Public Financing Costs: Evidence from U.S. Municipal Bond Markets [2021/04], with Alex Butler
We examine the impact of population aging on municipal access to credit. A one standard deviation increase in a state’s population age leads to a 23 basis point increase in municipal bond issue spread. Three mechanisms drive this effect: income tax revenue, healthcare liabilities, and pension underfunding. Constitutional pension protections and securities with lower credit quality or longer maturity exacerbate the effect. To control for endogenous migration and mortality patterns, we exploit variation from historical state fertility trends. Our findings highlight the challenges municipalities face to cope with systemic demographic transition.
3. Financing Public Goods [2021/08]
I study whether and how shocks to the supply of municipal credit affect both the quantity and quality of local public goods. I use a difference-in-differences approach based on regulations that affected bank demand for municipal bonds. Credit-constrained municipalities cut spending, especially infrastructure investment. Public service quality deteriorates, manifested in increased water contamination and prolonged power outages. While amendments to the regulation mitigated municipal credit constraints, evidence is mixed on whether the quality of public service recovered. My results highlight the impact of financial market disruptions on local governments and people, and the unintended consequences of a post-crisis banking regulation.
4. Deputization [2021/07], with Bruce Carlin and Tarik Umar, NBER Working Paper No. 27225
Deputization is a permissive policy that asks agents to help screen for dangerous activities without providing explicit incentives. To assess its efficacy, we exploit the staggered adoption of recent laws that deputized financial professionals to help fight elder financial abuse --- a widespread and pernicious problem that is hard to police. We find that deputization led to a 6%-9% decrease in elder financial abuse. Investment advisers may be more effective deputies than brokers, and existing safeguards curbed the benefits of deputization.
5. The Cost of Convenience: Ridehailing and Traffic Fatalities, with John Barrios and Yael Hochberg, NBER Working Paper No. 26783
We examine the effect of the introduction of ridehailing in U.S. cities on fatal traffic accidents. The arrival of ridehailing is associated with an increase of approximately 3% in the number of fatal accidents, for both vehicle occupants and pedestrians. Consistent with ridehailing increasing road usage, we find that introduction is associated with an increase in proxies for traffic congestion and with new car registrations. Consistent with a driver quality channel, accident increases are concentrated in ridehailing-eligible vehicles and those with passenger configurations suggestive of ridehailing. Back-of-the-envelope estimates of the annual cost in human lives range from $5.33B to $13.24B.
- R&R, Journal of Financial Economics
The introduction of the gig economy creates opportunities for would-be entrepreneurs to supplement their income in downside states of the world and provides insurance in the form of an income fallback in the event of failure. We present a conceptual framework supporting the notion that the gig economy may serve as an income supplement and as insurance against entrepreneurial-related income volatility, and utilize the arrival of the on-demand, platform-enabled gig economy in the form of the staggered rollout of ridehailing in U.S. cities to examine the effect of the arrival of the gig economy on new business formation. The introduction of gig opportunities is associated with an increase of ~5% in the number of new business registrations in the local area, and a correspondingly-sized increase in small business lending to newly registered businesses. Internet searches for entrepreneurship-related keywords increase ~7%, lending further credence to the predictions of our conceptual framework. Both the income supplement and insurance channels are empirically supported: the increase in entry is larger in regions with lower average income and higher credit constraints, as well as in locations with higher ex-ante economic uncertainty regarding future wage levels and wage growth.
2. Aging and Public Financing Costs: Evidence from U.S. Municipal Bond Markets [2021/04], with Alex Butler
- R&R, Journal of Public Economics
We examine the impact of population aging on municipal access to credit. A one standard deviation increase in a state’s population age leads to a 23 basis point increase in municipal bond issue spread. Three mechanisms drive this effect: income tax revenue, healthcare liabilities, and pension underfunding. Constitutional pension protections and securities with lower credit quality or longer maturity exacerbate the effect. To control for endogenous migration and mortality patterns, we exploit variation from historical state fertility trends. Our findings highlight the challenges municipalities face to cope with systemic demographic transition.
3. Financing Public Goods [2021/08]
- AEA (2022), MFA (2020), UEA( 2020), OFR PhD Symposium (2020)
- Distinguished Student Paper Award, EFA (2020)
I study whether and how shocks to the supply of municipal credit affect both the quantity and quality of local public goods. I use a difference-in-differences approach based on regulations that affected bank demand for municipal bonds. Credit-constrained municipalities cut spending, especially infrastructure investment. Public service quality deteriorates, manifested in increased water contamination and prolonged power outages. While amendments to the regulation mitigated municipal credit constraints, evidence is mixed on whether the quality of public service recovered. My results highlight the impact of financial market disruptions on local governments and people, and the unintended consequences of a post-crisis banking regulation.
4. Deputization [2021/07], with Bruce Carlin and Tarik Umar, NBER Working Paper No. 27225
- WFA (2021), NFA (2021), MFA (2021)*
Deputization is a permissive policy that asks agents to help screen for dangerous activities without providing explicit incentives. To assess its efficacy, we exploit the staggered adoption of recent laws that deputized financial professionals to help fight elder financial abuse --- a widespread and pernicious problem that is hard to police. We find that deputization led to a 6%-9% decrease in elder financial abuse. Investment advisers may be more effective deputies than brokers, and existing safeguards curbed the benefits of deputization.
5. The Cost of Convenience: Ridehailing and Traffic Fatalities, with John Barrios and Yael Hochberg, NBER Working Paper No. 26783
- NBER Economics of Digitization (2019)*, NBER Entrepreneurship (2018)*
We examine the effect of the introduction of ridehailing in U.S. cities on fatal traffic accidents. The arrival of ridehailing is associated with an increase of approximately 3% in the number of fatal accidents, for both vehicle occupants and pedestrians. Consistent with ridehailing increasing road usage, we find that introduction is associated with an increase in proxies for traffic congestion and with new car registrations. Consistent with a driver quality channel, accident increases are concentrated in ridehailing-eligible vehicles and those with passenger configurations suggestive of ridehailing. Back-of-the-envelope estimates of the annual cost in human lives range from $5.33B to $13.24B.
