Rawley Z. Heimer
Carroll School of Management
140 Commonwealth Avenue
Chestnut Hill, MA 02467-3809
Institutional Affiliation: Boston College
Information about this author at RePEc
NBER Working Papers and Publications
|June 2020||Personal Wealth and Self-Employment|
with , , : w27452
We examine how wealth windfalls affect self-employment decisions using data on cash payments from claims on Texas shale drilling to people throughout the United States. Individuals who receive large wealth shocks (greater than $50,000) have 51% higher self-employment rates. The increase in self-employment rates is driven by individuals who lengthen existing self-employment spells, and not by individuals who leave regular employment for self-employment. Moreover, the effect of wealth reverts for individuals whose payments run out. Rather than alleviating a financial constraint, our evidence suggests that unrestricted cash windfalls affect self-employment decisions primarily through self-employment’s non-pecuniary benefits.
|December 2017||Should Retail Investors' Leverage Be Limited?|
with : w24176
Does the provision of leverage to retail traders improve market quality or facilitate socially inefficient speculation that enriches financial intermediaries? We evaluate the effects of 2010 regulations that cap leverage in the U.S. retail foreign exchange market. Using three unique data sets and a difference-in-differences approach, we document that the leverage-constraint reduces trading volume by 23%, alleviates high-leverage traders’ losses by 40%, and reduces brokerages’ operating capital by 25%. Yet, the policy does not affect the relative bid-ask prices charged by the brokerages. These results suggest the policy improves belief-neutral social welfare without reducing market liquidity.
Published: Rawley Heimer & Alp Simsek, 2018. "Should Retail Investors’ Leverage Be Limited?," Journal of Financial Economics, .