Primary fields: Labor, Health, Entrepreneurship
Secondary Fields: Structural Microeconometrics, Innovation
In my job market paper, Where are the Young Entrepreneurs? A Study of Entrepreneurship over the Life Cycle, I develop a life-cycle framework analyzing self-employment based on the Roy (1951) model of occupational choice, focusing on the self-employment decisions of young labor market entrants. In this paper I extend the literature by quantifying the relative importance of reasons why people become entrepreneurs, which have been studied separately in previous research. In particular, I show that individuals also learn about their entrepreneurial ability while working as paid employees. I consider two policy counterfactuals: a subsidy targeting entry costs and entrepreneurship education targeting information frictions. Here I extend previous literature providing a mapping from the information quality of entrepreneurship education into career choices and long-term outcomes. A subsidy for young entrepreneurs increases participation but has small long-term effects. Entrepreneurship education can have sizable effects on participation and present value of income flows, even for low information quality. Nevertheless, the value of any particular entrepreneurship education program will depend on its cost and its information quality.
My second line of work intersects Health Economics with the Economics of Innovation. In the joint paper entitled Innovation and Diffusion of Medical Treatment, we introduce an empirical framework to capture how aggregate consumer demand affects innovation in medical treatment along multiple dimensions of quality. Our framework estimates a distribution that describes the size and direction of innovations, and embeds this distribution into a structural model of dynamic demand. In the model, forward-looking consumers make choices after forming expectations about the characteristics of future products. Externalities arise because aggregate consumer behavior changes the path of innovation, and hence dynamic payoffs. We apply this framework to data from the Multicenter AIDS Cohort Study, analyzing consumer choices and the realized path of innovations in the market for HIV treatments. Results suggest that consumer preferences towards experimentation can slow down technological progress.