Research -

Working Papers

Abstract: This paper studies the effects of tax incentives for capital investment on worker earnings and employment outcomes. Using matched employer–employee data from the U.S. Census Bureau and quasi-experimental variation in firms’ exposure to bonus depreciation, I estimate difference-in-differences models that compare workers based on their initial firm-level exposure to the policy. My results indicate that bonus depreciation generated significant and persistent gains in incumbent worker earnings while also reducing unemployment spells and exit from employment. Earnings effects were strongest in industries exposed to import competition and attenuated in capital-intensive and robot-adopting industries. Additional evidence suggests significant passthrough of policy-induced productivity gains to the earnings of workers who remained at their firm. My findings highlight that investment tax incentives can yield broad benefits to worker, particularly amid structural transformation in manufacturing.

Abstract: This paper studies how the personal economics experiences of owner-managers shape firm pay policy. Leveraging detailed survey data on the management roles of U.S. business owners, I show that firms operated by dominant owner-managers with greater past local unemployment rate exposure (URE) offer higher pay on average. Difference-in-differences estimates centered on firm ownership transitions show that high URE managers increase average worker earnings by 3.4 percent, while firm employment and revenue is unchanged. These results are not driven by contemporaneous labor market conditions, differences in the financial resources of new owner-managers, or age cohort or location-specific trends. I conduct further firm and worker-level analyses to explore how labor market experiences inform personnel strategies at the firm. I argue that my results are consistent with URE increasing the salience of worker turnover costs to the firm, leading owner-managers to better internalize a pay-turnover trade-off. Consequently, high URE managers retain a greater share of incumbent employees and offer greater relative pay premia to new hires.

Tax Planning and Multinational Behavior (with Roseanne Altshuler, Lysle Boller, and Juan Carlos Suárez Serrato), February 2025.

Abstract: We use IRS data to study the adoption and use of hybrid tax planning structures (HTPs) by US multinational corporations (MNCs). These strategies leveraged mismatches between US and foreign tax law to legally avoid corporate taxation. We find more than 35% of US foreign profits were linked to HTPs by 2016. Difference-in-differences models show that after HTP adoption, MNCs intensify profit-shifting behaviors relative to nonadopters, leading to sharp reductions in foreign effective tax rates. Adopting MNCs also experience greater growth in real economic activity, including foreign and domestic investment and global R&D. A structural model of heterogeneous firms reveals HTP adoption patterns consistent with adopting MNCs having lower tax planning costs and lower costs of expanding R&D activities. Counterfactual analyses show that policies restricting HTP tax advantages significantly reduce foreign investment. A domestic tax cut that harmonizes global rates can offset this reduction by stimulating global R&D, increasing productivity at home and abroad.

Capital Investment and Labor Demand: Evidence from 21st Century Tax Policy (with Mark Curtis, Daniel G Garrett, Eric Ohrn, and Juan Carlos Suárez Serrato), December 2023. Revision Requested at American Economic Review

Abstract: We study how tax policies that lower the cost of capital impact investment and labor demand. Difference-in-differences estimates using confidential Census Data on manufacturing establishments show that tax policies increased both investment and employment, but did not stimulate wage or productivity growth. Using a structural model, we find that the primary effect of the policy was to increase the use of all inputs by lowering costs of production and that capital and production workers are complementary inputs in modern manufacturing. Our results show that tax policies that incentivize capital investment do not lead manufacturing plants to replace workers with machines.

Work in Progress

The Local Effects of Commercial Gambling Legalization (with Daniel Hartley and Yilin Li)

Other Publications

Competitive Balance in Sports: A Multi-Dimensional Perspective (with Levi Bognar, Scott A. Brave, and R. Andrew Butters). Sports Economics Review 6, 2024: 1-15.

Uncovering the Sources of Team Synergy: Player Complementarities in the Production of Team Wins (with Scott A. Brave and R. Andrew Butters). Journal of Sports Analytics 5(4), 2019: 247 – 279.