Opportunities and Entrepreneurship: Evidence on Advanced Labor Market Experience (with Carlos Schmidt-Padilla and Hamilton Taveras), JMP
This paper provides the first experimental estimates of the effects of managerial labor market experience on career outcomes and subsequent measures of business creation. Exploiting randomized lotteries for government contracts to manage construction projects in the Dominican Republic, we show that after five years, individuals who win contracts are (i) 7.8 percentage points more likely to be owners of formal firms and (ii) less likely to be private-sector employees. Also, the firms created by lottery winners are more likely to hire and survive than those of non-winners. We use a selection model to recover the distribution of heterogeneity that drives selection into and returns from contractual experience. We find that workers select in based on potential gains and that the young drive firm creation. Since individuals with higher marginal benefits are willing to incur higher costs to participate, reducing the number of contracts allocated in the same event, or increasing application costs, would screen out applicants who may benefit from the program the least.
The Effects of Parental and Sibling Incarceration: Evidence from Ohio (with Samuel Norris and Jeffrey Weaver), revise and resubmit at American Economic Review
Every year, millions of Americans experience the incarceration of a family member. Using 30 years of administrative data from Ohio and exploiting differing incarceration propensities of randomly assigned judges, this paper provides the first quasi-experimental estimates of the effects of parental and sibling incarceration in the US. Contrary to conventional wisdom, parental incarceration has beneficial effects on children, reducing their likelihood of incarceration by 4.9 percentage points and improving their adult socioeconomic status. We also reject large effects of parental incarceration on academic performance and teen parenthood. Sibling incarceration leads to similar reductions in criminal activity.