Papers written by Author(s): 'William Kerr'
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Viewing papers 1 through 10 of 14
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Working PaperPositioned at Extremes: Future Job Placements of Immigrant Students at U.S. Colleges
January 2026
Working Paper Number:
CES-26-08
Immigrant students who attend U.S. colleges are disproportionately employed in either large firms'especially multinationals'or small firms and self-employment. Using linked Census and longitudinal employment data, we trace the jobs taken by college students in 2000 during the 2001-20 period and evaluate four mechanisms shaping sector and firm size placement: geographic clustering, degree specialization, firm capabilities/visas, and ethnic self-employment specialization. Degree fields predict large firm and MNE placement, while ethnic specialization explains small firm sorting. Immigrant students who remain in the U.S. earn more than their native peers, suggesting the segmentation reflects productive sorting rather than blocked opportunity.View Full Paper PDF
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Working PaperCareers of Minimum Wage Workers
January 2026
Working Paper Number:
CES-26-07
We characterize the careers of minimum wage workers by merging SIPP panels covering 1992-2016 into the LEHD. A long-run analysis shows strong earnings growth for these workers in subsequent decades, becoming indistinguishable from peers earning modestly more initially. Most of this growth is due to the steep earnings trajectories of young workers. Older workers earning minimum wages show a modest dip in earnings at that moment compared to earlier and later periods. Increases in state minimum wages do not significantly alter the future careers of workers who are on the minimum wage when the increases occur.View Full Paper PDF
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Working PaperThe Transformation of Self Employment
February 2022
Working Paper Number:
CES-22-03
Over the past half-century, while self-employment has consistently accounted for around one in ten of the United States workforce, its composition has changed. Since 1970, industries with high startup capital requirements have declined from 53% of self-employment to 23%. This same time period also witnessed declines in 'hometown' local entrepreneurship and the probability of the self-employed being among top earners. Using 2016 data, we show that high startup capital requirements are linked with lower profitability at small scales. The transition away from high startup capital industries appears most closely linked to changes in small business production functions and less due to advantageous reallocation to other opportunities, growth in returns-to-scale among large businesses, or a worsening of financing conditions and debt levels.View Full Paper PDF
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Working PaperWhose Job Is It Anyway? Co-Ethnic Hiring in New U.S. Ventures
March 2021
Working Paper Number:
CES-21-05
We explore co-ethnic hiring among new ventures using U.S. administrative data. Co-ethnic hiring is ubiquitous among immigrant groups, averaging about 22.5% and ranging from 2% to 40%. Co-ethnic hiring grows with the size of the local ethnic workforce, greater linguistic distance to English, lower cultural/genetic similarity to U.S. natives, and in harsher policy environments for immigrants. Co ethnic hiring is remarkably persistent for ventures and for individuals. Co-ethnic hiring is associated with greater venture survival and growth when thick local ethnic employment surrounds the business. Our results are consistent with a blend of hiring due to information advantages within ethnic groups with some taste-based hiring.View Full Paper PDF
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Working PaperINNOVATION, REALLOCATION AND GROWTH
April 2013
Working Paper Number:
CES-13-23
We build a model of firm-level innovation, productivity growth and reallocation featuring endogenous entry and exit. A key feature is the selection between high- and low-type firms, which differ in terms of their innovative capacity. We estimate the parameters of the model using detailed US Census micro data on firm-level output, R&D and patenting. The model provides a good fit to the dynamics of firm entry and exit, output and R&D, and its implied elasticities are in the ballpark of a range of micro estimates. We find industrial policy subsidizing either the R&D or the continued operation of incumbents reduces growth and welfare. For example, a subsidy to incumbent R&D equivalent to 53 of GDP reduces welfare by about 1.53 because it deters entry of new high-type firms. On the contrary, substantial improvements (of the order of 53 improvement in welfare) are possible if the continued operation of incumbents is taxed while at the same time R&D by incumbents and new entrants is subsidized. This is because of a strong selection effect: R&D resources (skilled labor) are inefficiently used by low-type incumbent firms. Subsidies to incumbents encourage the survival and expansion of these firms at the expense of potential high-type entrants. We show that optimal policy encourages the exit of low-type firms and supports R&D by high-type incumbents and entry.View Full Paper PDF
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Working PaperENTREPRENEURSHIP AND URBAN GROWTH:AN EMPIRICAL ASSESSMENT WITH HISTORICAL MINES
April 2013
Working Paper Number:
CES-13-15
Measures of entrepreneurship, such as average establishment size and the prevalence of start-ups, correlate strongly with employment growth across and within metropolitan areas, but the endogeneity of these measures bedevils interpretation. Chinitz (1961) hypothesized that coal mines near Pittsburgh led that city to specialization in industries, like steel, with significant scale economies and that those big firms led to a dearth of entrepreneurial human capital across several generations. We test this idea by looking at the spatial location of past mines across the United States: proximity to historical mining deposits is associated with bigger firms and fewer start-ups in the middle of the 20th century. We use mines as an instrument for our entrepreneurship measures and find a persistent link between entrepreneurship and city employment growth; this connection works primarily through lower employment growth of start- ups in cities that are closer to mines. These effects hold in cold and warm regions alike and in industries that are not directly related to mining, such as trade, finance and services. We use quantile instrumental variable regression techniques and identify mostly homogeneous effects throughout the conditional city growth distribution.View Full Paper PDF
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Working PaperAgglomerative Forces and Cluster Shapes
June 2012
Working Paper Number:
CES-12-09
We model spatial clusters of similar firms. Our model highlights how agglomerative forces lead to localized, individual connections among firms, while interaction costs generate a defined distance over which attraction forces operate. Overlapping firm interactions yield agglomeration clusters that are much larger than the underlying agglomerative forces themselves. Empirically, we demonstrate that our model's assumptions are present in the structure of technology and labor flows within Silicon Valley and its surrounding areas. Our model further identifies how the lengths over which agglomerative forces operate influence the shapes and sizes of industrial clusters; we confirm these predictions using variations across both technology clusters and industry agglomeration.View Full Paper PDF
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Working PaperGrowth Through Heterogeneous Innovations
June 2012
Working Paper Number:
CES-12-08
We study how exploration versus exploitation innovations impact economic growth through a tractable endogenous growth framework that contains multiple innovation sizes, multiproduct firms, and entry/exit. Firms invest in exploration R&D to acquire new product lines and exploitation R&D to improve their existing product lines. We model and show empirically that exploration R&D does not scale as strongly with firm size as exploitation R&D. The resulting framework conforms to many regularities regarding innovation and growth differences across the firm size distribution. We also incorporate patent citations into our theoretical framework. The framework generates a simple test using patent citations that indicates that entrants and small firms have relatively higher growth spillover effects.View Full Paper PDF
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Working PaperClusters of Entrepreneurship
October 2009
Working Paper Number:
CES-09-36
Employment growth is strongly predicted by smaller average establishment size, both across cities and across industries within cities, but there is little consensus on why this relationship exists. Traditional economic explanations emphasize factors that reduce entry costs or raise entrepreneurial returns, thereby increasing net returns and attracting entrepreneurs. A second class of theories hypothesizes that some places are endowed with a greater supply of entrepreneurship. Evidence on sales per worker does not support the higher returns for entrepreneurship rationale. Our evidence suggests that entrepreneurship is higher when fixed costs are lower and when there are more entrepreneurial people.View Full Paper PDF
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Working PaperLocal Industrial Conditions and Entrepreneurship: How Much of the Spatial Distribution Can We Explain?
October 2008
Working Paper Number:
CES-08-37
Why are some places more entrepreneurial than others? We use Census Bureau data to study local determinants of manufacturing startups across cities and industries. Demo- graphics have limited explanatory power. Overall levels of local customers and suppliers are only modestly important, but new entrants seem particularly drawn to areas with many smaller suppliers, as suggested by Chinitz (1961). Abundant workers in relevant occupations also strongly predict entry. These forces plus city and industry fixed effects explain between sixty and eighty percent of manufacturing entry. We use spatial distributions of natural cost advantages to address partially endogeneity concerns.View Full Paper PDF
