Financing Entrepreneurship and Innovation
Paper Session
Monday, Jan. 4, 2021 10:00 AM - 12:00 PM (EST)
- Chair: Antoinette Schoar, Massachusetts Institute of Technology
Does Private Equity Investment in Healthcare Benefit Patients? Evidence from Nursing Homes
Abstract
Private equity (PE) investment in healthcare has increased dramatically in recent years. This paper studies how PE buyouts affect the quality of care in nursing homes. Using comprehensive facility-level data from 2000 to 2017, we find robust evidence of declines in patient health and compliance with care standards. These declines appear to reflect cuts to less skilled nurses, one component of efficiency improvements that also include higher bed utilization. Neither selection nor patient composition changes explain the results. The particular incentives of PE managers appear important, as acquisitions by non-PE corporates and chains don’t produce these patterns.The Unobserved Returns in Entrepreneurship
Abstract
This presents an alternative perspective to a longstanding empirical puzzle: that most entrepreneurs persevere despite persistently low earnings and earnings growth. Since entrepreneurial earnings are notoriously difficult to measure, instead of focusing solely on individual labor income, I approach the question from a household welfare angle. I look at how the switch into self-employment corresponds to changes in reported earnings and hours worked at the individual level, and also in expenditure and wealth at the household level. Using longitudinal data from the PSID that spans 47 years, I find that while individuals report earning on average 26% less in self-employment, their household expenditure is in fact 3.6% higher. This expenditure premium accrues with experience in self-employment, and is not offset by lower sav- ings, higher uncertainty or longer work hours. Restricting the analysis to two different subsamples: a) those with at least sixteen years of schooling and b) those who go on to incorporate, yields the same qualitative results.The Effect of Student Debt on Entrepreneurship: Evidence from Online Social Networks
Abstract
This paper studies the effect of student debt on individual labor market trajectories. I build a novel dataset covering hundreds of thousands of U.S. students by merging university commencement records with an online professional resume database, and use the staggered implementation of so-called "Universal No Loan Policies" across multiple universities from 1998 to 2018 as a quasi-experimental source of variation in student debt. My preliminary results suggest that students with higher levels of student debt are less likely to choose careers with higher potential earnings growth (such as entrepreneurs) and careers that require early investments in human capital (such as doctors and lawyers). These findings highlight the role of early-career credit constraints in determining human capital accumulation and long-term labor market outcomes.Discussant(s)
Richard R. Townsend
,
University of California-San Diego
Anusha Chari
,
University of North Carolina-Chapel Hill
Manuel Adelino
,
Duke University
Constantine Yannelis
,
University of Chicago
JEL Classifications
- G2 - Financial Institutions and Services
- O3 - Innovation; Research and Development; Technological Change; Intellectual Property Rights