Research

Published Papers

  1. "Investing with Purpose: Evidence from Private Foundations"
  • We study the asset allocation and investment performance of U.S. private foundations that support the charitable sector. Large foundations generated positive risk-adjusted returns before 2008, driven by early access to private equity and venture capital funds, but have underperformed since. The median foundation underperforms by more than 100 basis points. Foundations with concentrated stock holdings achieve higher returns but assume more risk. Due to the constraints imposed by the 5% minimum spending rule and accommodating monetary policy, foundations increase risk-taking and reach for yield. Over time, a conservative asset allocation decreases real wealth, reducing charitable giving.

Working Papers

  1. "Immigration and Local Government Finances"
  • Immigration stimulates economic growth, but also increases demand for local public resources. This paper examines the net effect of immigration on local governments' fiscal health. We estimate the effects of legal and unauthorized immigration using a Bartik shift-share design constructed from individual-level U.S. Census data dating back to 1880 and court-order data on unauthorized immigrant inflows. We find that immigrant inflows improve local governments' access to finance, reducing municipal bond yields and improving local governments' fiscal health. These effects are strongest in counties with tighter labor markets and more financial slack and are present for both legal and unauthorized immigration. The benefits of immigration are driven by increasing employment and stronger operating margins as revenue growth, driven by increased sales tax and state intergovernmental transfers, outpaces expense growth in the long run.
  1. "Does Fund Size Affect Private Equity Performance? Evidence from Donations to Private Universities"
  • Do private equity (PE) returns rise or fall with fund scale? A causal effect is difficult to identify because better managers can raise larger funds. We develop an instrument using donations to universities. Donations affect fund size because endowments are sensitive to donation income, have sticky relationships with PE managers, and signal fund quality to other Limited Partner investors. We show decreasing returns to scale: a 1% size increase in fund size reduces net IRR by 0.1 percentage points. Larger funds do larger deals, which underperform. We find no change in risk, in part because additional deals are more levered.
  1. "Diversifying Labor Income Risk: Evidence from Income Pooling"
  • This paper studies the effects of a contracting innovation which allows individuals to diversify their labor income risk by sharing labor income above a ceiling into a common pool. I use novel data from professional baseball players to document sign-up correlated with an individual’s level of downside protection and sophistication. Players are significantly more likely to experience an injury before expressing interest in the contract and are drafted in later rounds. I find some evidence of productivity declines following sign-up with an instrumental variables approach built around peer networks confirming these results. Increased monitoring proxied for by players pooling with teammates reduces the likelihood of players experiencing a decline in performance after pooling. Players contract with others of similar ability, backgrounds, and occupations to mitigate information asymmetries.
  1. "Does Innovation Decline Post-IPO?"
  • Bernstein (2015) estimates that innovation quality decreases by 43 percent more post-IPO for firms that successfully go public to firms that file to go public but ultimately withdrawal. I document that 54 percent of this magnitude is attributable to a negative survivorship bias from sample selection. In addition, I find no effect when extending his results to 2012, partially attributable to the decline in relevance of his identification strategy. I document an increase in trademark production for firms with completed IPOs which suggests public firms shift their innovative focus towards commercialization. These results cast doubt on the adverse effects of going public on innovation and the recent IPO literature that instruments for IPO completion using the post-filing returns on the Nasdaq stock index.

Other Publications

  1. "The Role of Debt in Financing Higher Education", 2024, NBER: Financing Institutions of Higher Education