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Personal Bankruptcy Law and Entrepreneurship

January 2017

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• Working Paper

  
  
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• Working Paper

  
  
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• Working Paper

  
  
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  April 2024

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• Working Paper

  
  
  Locally Owned Bank Commuting Zone Concentration and Employer Start-Ups in Metropolitan, Micropolitan and Non-Core Rural Commuting Zones from 1970-2010
  

  August 2018

  Authors: Charles Tolbert, Craig Wesley Carpenter, F. Carson Mencken, Michael Lotspeich

  Working Paper Number:

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• Working Paper

  
  
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  July 2023

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  How does access to financing influence racial pay inequality inside firms? We answer this question using the employer-employee matched data administered by the U.S. Census Bureau and detailed resume data recording workers' career trajectories. Exploiting exogenous shocks to firms' debt capacity, we find that better access to debt financing significantly narrows the earnings gap between minority and white workers. Minority workers experience a persistent increase in earnings and also a rise in the pay rank relative to white workers in the same firm. The effect is more pronounced among mid- and high-skill minority workers, in areas where white workers are in shorter supply, and for firms with ex-ante less diverse boards and greater pre-existing racial inequality. With better access to financing, minority workers are also more likely to be promoted or be reassigned to technology-oriented occupations compared to white workers. Our evidence is consistent with access to financing making firms better utilize minority workers' human capital.
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