Research

Abstract: This paper analyzes which individuals benefit when firm demand increases and whether the same groups bear the costs of demand decreases. We develop a flexible framework to estimate the incidence of firm shocks with data on each firm’s workers and owners. Specifically, we use linked firm-worker-owner tax data from U.S. pass-through firms to track how each dollar that firms distribute as wages and business profits is allocated among individuals. These data allow us to conduct the first joint analysis of how changes in firm demand affect both workers and owners. We leverage export-demand variation and value-added fluctuations as firm-specific demand shocks. The incidence of these shocks is highly unequal. Individuals in the top 1% of the national income distribution receive up to 60% of the income changes, while those in the bottom 50% receive less than 15%. This unequal distribution arises because firm owners receive most of the income changes from the shocks and are disproportionately in the top of the income distribution. Moreover, the incidence is asymmetric for positive versus negative demand changes. Workers bear 26% of the losses from a negative shock that reduces firm value added by 14% but receive only 10% of the gains from a similarly sized positive shock. This asymmetry arises primarily from the additional costs of job loss for workers following negative demand shocks to the firm.

Abstract: We study the effect of private-sector unionization on establishment employment and survival. Specifically, we analyze National Labor Relations Board (NLRB) union elections from 1981 to 2005 using administrative Census data on the universe of establishments in the U.S. Our empirical strategy extends a difference-in-differences design with regression discontinuity extrapolation methods. This strategy allows us to estimate treatment effects that include elections that win by large margins of support. We show that unionization decreases an establishment's employment and likelihood of survival. We hypothesize that two reasons for these effects are firms' ability to avoid working with new unions and managers' opposition to unions. We test this hypothesis for unionization in manufacturing. There, the negative effects are significantly larger for elections at multi-establishment firms. Additionally, after a successful union election at one establishment, employment increases at the firms' other establishments. Both pieces of evidence are consistent with firms avoiding new unions by shifting production from unionized establishments to other establishments. Finally, we find larger declines in employment and survival following elections when managers were more opposed to the union. To support this, we estimate treatment effect heterogeneity based on two proxies for managers' opposition: delays during the election process and the lack of other unionized establishments at the firm. Taken together, our results are consistent with firms' union avoidance tactics contributing to the overall negative effects of unionization.

Abstract: This paper identifies the effects of firms on the career advancement of blue-collar workers and interprets these effects through the mechanism of employer learning. I use administrative data on the universe of Brazilian formal employment to study vertical promotions from production jobs to supervisory jobs, which are an important source of wage growth for most young workers. By comparing workers around job-to-job transitions, I show that differences in average firm promotion rates reflect persistent differences in the effects of firms on workers. Workers who move to a high promotion firm become substantially more likely than other job movers to be promoted, but they are even more likely to leave formal employment altogether. Correspondingly, their average long-term wage gains are negligible. I explain these effects using a model where firms differ in the rate they learn about the abilities of employed workers. High learning firms improve the efficiency of matching between workers and jobs, but these firms also exacerbate the adverse selection of unemployed workers and increase occupational wage inequality. By quantifying the parameters of the model using my estimated effects, I show that skill misallocation remains high and ex-post market power for employers can be large.

Abstract: Using competition to increase school quality is a key rationale for promoting choice within school districts, but evidence on this channel has generally been indirect. In this project, I directly estimate a theoretically motivated measure of schools' competitive pressures using centralized assignment data from a large urban school district’s deferred-acceptance mechanism. I find that competitive pressure within the district is dispersed, and most of the variation in competition is unexplained by concentration. While there is substantial pressure to attract more students to some schools, these competitive incentives do not induce schools to raise their school effectiveness on academic achievement. Instead, schools respond by shifting discretionary expenditures from administration to instruction.

Abstract: We introduce the Business Dynamics Statistics of Human Capital (BDS-HC) tables, a new Census Bureau experimental product that provides public-use statistics on the workforce composition of firms and its relationship to business dynamics. We use administrative W-2 filings to combine population-level worker demographic data with longitudinal business data to estimate the demographic and educational composition of nearly all non-farm employer businesses in the United States between 2006 and 2022. We use this newly constructed data to document the evolution of employment, entry, and exit of employers based on their workforce compositions. We also provide new statistics on the interaction between firm and worker characteristics, including the composition of workers at startup firms. We find substantial changes between 2006 and 2022 in the distribution of employers along several dimensions, primarily driven by changing workforce compositions within continuing firms rather than the reallocation of employment between firms. We also highlight systematic differences in the business dynamics of firms by their workforce compositions, suggesting that different groups of workers face different economic environments due to their employers.

Abstract: The Business Dynamics Statistics of Single Unit Firms (BDS-SU) is an experimental data product that provides information on employment and payroll dynamics for each quarter of the year at businesses that operate in one physical location. This paper describes the creation of the data tables and the value they add to the existing Business Dynamics Statistics (BDS) product. We then present some analysis of the published statistics to provide context for the numbers and demonstrate how they can be used to understand both national and local business conditions, with a particular focus on 2020 and the recession induced by the COVID-19 pandemic. We next examine how firms fared in this recession compared to the Great Recession that began in the fourth quarter of 2007. We also consider the heterogenous impact of the pandemic on various industries and areas of the country, showing which types of businesses in which locations were particularly hard hit. We examine business exit rates in some detail and consider why different metro areas experienced the pandemic in different ways. We also consider entry rates and look for evidence of a surge in new businesses as seen in other data sources. We finish by providing a preview of on-going research to match the BDS to worker demographics and show statistics on the relationship between the characteristics of the firm’s workers and outcomes such as firm exit and net job creation.