“A Tale of Two C(…)s: Competence and Complementarity” (Research presentation, Society for Economic Dynamics (SED) Annual Meeting, Toulouse, France)
Faculty Research Grant
In collaboration with Fane Groes from the Copenhagen Business School in Denmark, the project analyzes the allocation of entrepreneurial and managerial talent as well as human capital to firms and establishments. By combining a matched employer-employee dataset that covers the work histories of the entire Danish labor force between 2000 and 2009 with a dynamic model of occupational choice, we can quantify the macroeconomic effects of human capital misallocation. The paper builds on and expands a growing macroeconomic literature that connects welfare and aggregate productivity to the misallocation of labor and capital at the level of individual firms and establishments. Moreover, the model is a critical building block toward a dynamic theory of entrepreneurship and firm growth, which is the focus of a follow-up project with two collaborators from UCLA.