"Taxes, Regulations and Business Structure in the US" (November 2023)

Abstract:   The United States has experienced a dramatic shift in the distribution of output across different business structures in the US since the 1980s. The share of output of pass-through entities (S-corporations, LLCs, partnerships, sole proprietorships) almost doubled, while that of C-corporations declined by one-fourth. During this period, there have been notable changes in the tax structure and tax avoidance within these entities. Using a dynamic growth model with endogenous tax avoidance, occupation choice, and uninsurable entrepreneurial risk, I study the extent to which changes in taxation can account for the observed reallocation of output. My quantitative results indicate that changes in tax rates account for 14 percent of the reallocation of output share observed in the US. I also find that the cumulative effect of changes in taxation, borrowing ability, and tax avoidance accounts for about 26 percent of the reallocation of output. Moreover, other regulatory changes – reflected in overhead costs – can lead to a substantial output reallocation toward pass-through entities. A policy experiment of imposing a tax on top wealth holders leads to a significant increase in the net-tax gap, and more resources allocated to tax avoidance activities, and a decline in government revenue.

Presented at: Midwest Macro Meeting Fall 2022 (November 2022), Southern Economic Association 93rd Annual Meeting (November 2023)

"Entrepreneurship, Marriage and Female Labor Force Participation in the US"  (October 2024)

Abstract: The United States has experienced a significant decline in firm entry rates and entrepreneurship since the 1980s. I document that this decline is more pronounced among married households and men, coinciding with changes in demographic composition (including the share of married households, skilled individuals, and marital sorting) and the rise in female labor force participation. To explore the relationship between demographic shifts and entrepreneurship, I develop a model of occupational choice that incorporates marital status, education, and gender. My findings suggest that changes in demographic composition account for 76% of the decline in entrepreneurship in the U.S.

Presented at: Midwest Macro Meeting Fall 2023 (November 2023), European Economic Association Rotterdam (August 2024)  

"Entrepreneurship, Inequality, and Redistribution" joint with Hakki Yazici 

"Marital Sorting, Joint Labor Supply and the Gender Wage Gap" joint with Terry Cheung and Siyu Shi.