I am an Assistant Professor of Finance at Boston College and a Junior Fellow at the George J. Stigler Center for the Study of the Economy and the State at the University of Chicago Booth School of Business.
Embedded Files
PUBLISHED PAPERS
PUBLISHED PAPERS
Declining Labor and Capital Shares [Link, Internet Appendix, SSRN Version] Journal of Finance, 75(5): 2421-2463, 2020
Abstract. This paper presents direct measures of capital costs, equal to the product of the required rate of return on capital and the value of the capital stock. The capital share, equal to the ratio of capital costs and gross value added, does not offset the decline in the labor share. Instead, a large increase in the share of pure profits offsets declines in the shares of both labor and capital. Industry data show that increases in concentration are associated with declines in the labor share.
70 Years of US Corporate Profits (with Seth G. Benzell) [Link] Journal of Corporate Finance, 2024
Abstract. We construct and compare aggregate measures of profits for the U.S. non-financial corporate sector over the period 1946--2016. The measures commonly show that the profit share is declining from 1946 to the early 1980s and has been increasing since. As a share of gross value added, profits today are higher than they were in 1984, but lower than their value in the years after World War II.
Capitalization of Intellectual Property Products Does Not Explain the Decline in the Labor Share (with Suresh Nallareddy and Maria Ogneva) [Link] Review of Economic Dynamics, 2025
Abstract. We reevaluate the role of the capitalization of Intellectual Property Products (IPP) in the decline in the labor share. Using the same aggregate U.S. data as Koh, Santaeulàlia‐Llopis and Zheng (2020), we show that the labor share has clearly declined in recent decades and that this decline does not depend on the capitalization of IPP. The approach of KSLZ, which estimates a linear time trend for the period 1929--2018, conflates a gradual and long-run increase in IPP investment with a decline in the labor share in recent decades. In addition, in both aggregate and industry data, we show that the increase in the rate of IPP investment is nearly fully offset by depreciation. As a consequence, the labor share of net value added and its decline in recent decades are insensitive to IPP capitalization.
Value without Employment (with Stavros Panageas) [Link, NBER Working Paper] Journal of Finance (Forthcoming)
Abstract. Young firms' contribution to aggregate employment has been underwhelming. However, we show that a similar trend is not apparent in their contribution to aggregate sales or stock-market capitalization, implying that these firms have exhibited a high ratio of average-to-marginal revenue-product-of-labor. We study the implications of a gradual shift in the average-to-marginal revenue-product-of-labor within a model of dynamic firm heterogeneity. We show that this shift provides a) a unified explanation for several facts related to the decline in ``business dynamism'', and b) a possible explanation for why large declines in young-firm employment can have only a moderate effect on aggregate output.
WORKING PAPERS
WORKING PAPERS
Antitrust Enforcement Increases Economic Activity (with Tania Babina, Jessica Jeffers, Ezra Karger, and Ekaterina Volkova) [SSRN Version] Revise and Resubmit American Economic Journal: Applied Economics
We hand-collect and standardize information describing all 3,055 antitrust lawsuits brought by the Department of Justice (DOJ) between 1971 and 2018. Using restricted establishment-level microdata from the U.S. Census, we compare the economic outcomes of a non-tradable industry in states targeted by DOJ antitrust lawsuits to outcomes of the same industry in other states that were not targeted. We document that DOJ antitrust enforcement actions permanently increase employment by 5.4% and business formation by 4.1%. Using an event-study design, we find (1) a sharp increase in payroll that exceeds the increase in employment, meaning that DOJ antitrust enforcement increases average wages, (2) an economically smaller increase in sales that is statistically insignificant, and (3) a precise increase in the labor share. While we cannot separately measure the quantity and price of output, the increase in production inputs (employment), together with a proportionally smaller increase in sales, strongly suggests that these DOJ antitrust enforcement actions increase the quantity of output and simultaneously decrease the price of output. Our results show that government antitrust enforcement leads to persistently higher levels of economic activity in targeted industries.
M&A and the Rise of Concentration (with Ezra Karger and Scott Loring) Draft Coming Soon (Available Upon Request)
This paper provides the first quantification of the contribution of M&A to rising concentration. Using comprehensive data from the U.S. Economic Census, we show that M&A has contributed to rising concentration in every sector and that M&A contributes 44% of the increase in aggregate concentration. We present an empirical decomposition of changes in concentration that further accounts for the effects of entry and exit. Last, we present analysis designed to help us understand the possible extent to which the relaxing of merger guidelines or lax government enforcement of existing guidelines contributed to the rise in concentration.
Low Wages Aren't a Growing Problem (with David Abraham) [Link, SSRN Version]
Abstract. Statements by high-profile political figures and supporting academic research have led to a common perception of worsening job prospects for low-wage workers in the US. In this paper, we show that since the early 1980s there has been a decline in the share of workers earning low wages. This holds across sub-populations and across thresholds for determining what constitutes a low wage. Much of the decline occurs over two periods: the late 1990s and the late 2010s. The decline is greater and steadier for women than for men. We further show that the worker-level persistence of low wages has not increased, and has likely decreased, over time.
Classifying Industries into Tradable/Nontradable via Geographic Radius Serve (with Ezra Karger) [SSRN Version, csv file]
Abstract. We present a complete classification of six-digit North American Industry Classification System (NAICS) industries into tradable and non-tradable. Those industries that have establishments located in close proximity to a large fraction of the population are classified as non-tradable. The results of our classification of six-digit NAICS industries into tradable and non-tradable are available in CSV format from the authors upon request.
ARCHIVED PAPERS
ARCHIVED PAPERS
Who's in Favor of Competition? (with José Azar) [Link]
Abstract. We study and classify households whose interests as owners of corporations exceed their interests as workers and consumers and we refer to these households as Capitalists. As households age, they increase their interests as owners (through the acquisitions of corporate assets) and reduce their interest as workers (as they have fewer years left in the labor force). We find that Capitalists make up 30% of the population, earn close to half of all income, and own nearly 80% of the wealth. While they are a minority of the population, Capitalists are far more engaged in the political process and make up a majority of political contributions. Relative to the Forbes 400, we find that the households that we classify as Capitalists are far larger in number, wealth, and political importance.
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