Entrepreneurs, Chance, and the Deterministic Concentration of Wealth

In many economies, wealth is strikingly concentrated. Entrepreneurs–individuals with ownership in for-profit enterprises–comprise a large portion of the wealthiest individuals, and their behavior may help explain patterns in the national distribution of wealth. Entrepreneurs are less diversified and more heavily invested in their own companies than is commonly assumed in economic models. We present an intentionally simplified individual-based model of wealth generation among entrepreneurs to assess the role of chance and determinism in the distribution of wealth. We demonstrate that chance alone, combined with the deterministic effects of compounding returns, can lead to unlimited concentration of wealth, such that the percentage of all wealth owned by a few entrepreneurs eventually approaches 100%. Specifically, concentration of wealth results when the rate of return on investment varies by entrepreneur and by time. This result is robust to inclusion of realities such as differing skill among entrepreneurs. The most likely overall growth rate of the economy decreases as businesses become less diverse, suggesting that high concentrations of wealth may adversely affect a country's economic growth. We show that a tax on large inherited fortunes, applied to a small portion of the most fortunate in the population, can efficiently arrest the concentration of wealth at intermediate levels

Wealth, Tastes, and Entrepreneurial Choice

The nonpecuniary benefits of managing a small business are a first order consideration for many nascent entrepreneurs, yet the preference for business ownership is mostly ignored in models of entrepreneurship and occupational choice. In this paper, we study a population with varying entrepreneurial tastes and wealth in a simple general equilibrium model of occupational choice. This choice yields several important results: (1) entrepreneurship can be thought of as a normal good, generating wealth effects independent of any financing constraints; (2) nonpecuniary entrepreneurs select into small-scale firms; and (3) subsidies designed to stimulate more business entry can have regressive distributional effects. Despite abstracting from other important considerations such as risk, financing constraints, and innovation, we show that nonpecuniary compensation is particularly relevant in discussions of small businesses

Financial Structure and Economic Welfare: Applied General Equilibrium Development Economics

This review provides a common framework for researchers thinking about the next generation of micro-founded macro models of growth, inequality, and financial deepening, as well as direction for policy makers targeting microfinance programs to alleviate poverty. Topics include treatment of financial structure general equilibrium models: testing for as-if-complete markets or other financial underpinnings; examining dual-sector models with both a perfectly intermediated sector and a sector in financial autarky, as well as a second generation of these models that embeds information problems and other obstacles to trade; designing surveys to capture measures of income, investment/savings, and flow of funds; and aggregating individuals and households to the level of network, village, or national economy. The review concludes with new directions that overcome conceptual and computational limitations.National Science Foundation (U.S.)National Institutes of Health (U.S.)Templeton FoundationBill & Melinda Gates Foundatio

The COVID-19 pandemic and its global effects on dental practice : An International survey

Objectives: A multicentre survey was designed to evaluate the impact of COVID-19 outbreak on dental practice worldwide, estimate the COVID-19 related symptoms/signs, work attitudes and behaviour and the routine use of protective measures and Personal Protective Equipment (PPE). Methods: A global survey using a standardized questionnaire with research groups from 36 countries was designed. The questionnaire was developed and pretested during April 2020 and contained three domains: 1) Personal data; 2) COVID-19 positive rate and symptoms/signs presumably related to the coronavirus; 3) Working conditions and PPE adopted after the outbreak. Countries' data were grouped by the Country Positive Rate (CPR) during the survey period and by Gross-National-Income per capita. An ordinal multinomial logistic regression model was carried out with COVID-19 self-reported rate referred by dental professionals as dependent variable to assess the association with questionnaire items. Results: A total of 52,491 questionnaires were returned with a male/female ratio of 0.63. Out of the total respondents, 7,859 dental professionals (15%) reported symptoms/signs compatible with COVID-19. More than half of the sample (n = 27,818; 53%) stated to use FFP2/N95 masks, while 21,558 (41.07%) used eye protection. In the bivariate analysis, CPR and N95/FFP2 were significantly associated (OR = 1.80 95% =5.20 95% 95% CI = 1.60/2.82 and OR CI = 1.44/18.80, respectively), while Gross-National-Income was not statistically associated with CPR (OR = 1.09 CI = 0.97/1.60). The same significant associations were observed in the multivariate analysis. Conclusions: Oral health service provision has not been significantly affected by COVID-19, although access to routine dental care was reduced due to country-specific temporary lockdown periods. While the dental profession has been identified at high-risk, the reported rates of COVID-19 for dental professionals were not significantly different to those reported for the general population in each country. These findings may help to better plan oral health care for future pandemic events

The COVID-19 pandemic and its global effects on dental practice. An international survey

Objectives: A multicentre survey was designed to evaluate the impact of COVID-19 outbreak on dental practice worldwide, estimate the COVID-19 related symptoms/signs, work attitudes and behaviour and the routine use of protective measures and Personal Protective Equipment (PPE). Methods: A global survey using a standardized questionnaire with research groups from 36 countries was designed. The questionnaire was developed and pretested during April 2020 and contained three domains: 1) Personal data; 2) COVID-19 positive rate and symptoms/signs presumably related to the coronavirus; 3) Working conditions and PPE adopted after the outbreak. Countries’ data were grouped by the Country Positive Rate (CPR) during the survey period and by Gross-National-Income per capita. An ordinal multinomial logistic regression model was carried out with COVID-19 self-reported rate referred by dental professionals as dependent variable to assess the association with questionnaire items. Results: A total of 52,491 questionnaires were returned with a male/female ratio of 0.63. Out of the total respondents, 7,859 dental professionals (15%) reported symptoms/signs compatible with COVID-19. More than half of the sample (n = 27,818; 53%) stated to use FFP2/N95 masks, while 21,558 (41.07%) used eye protection. In the bivariate analysis, CPR and N95/FFP2 were significantly associated (OR = 1.80 95%CI = 1.60/2.82 and OR = 5.20 95%CI = 1.44/18.80, respectively), while Gross-National-Income was not statistically associated with CPR (OR = 1.09 95%CI = 0.97/1.60). The same significant associations were observed in the multivariate analysis. Conclusions: Oral health service provision has not been significantly affected by COVID-19, although access to routine dental care was reduced due to country-specific temporary lockdown periods. While the dental profession has been identified at high-risk, the reported rates of COVID-19 for dental professionals were not significantly different to those reported for the general population in each country. These findings may help to better plan oral health care for future pandemic events

Taxation, Innovation, and Entrepreneurship

We examine how basic research should be financed. While basic research is a public good benefiting innovating entrepreneurs it also affects the entire economy: occupational choices of potential entrepreneurs, wages of workers, dividends to shareholders, and aggregate output. We show that the general economy impact of basic research rationalizes a pecking order of taxation to finance basic research. In particular, in a society with desirable dense entrepreneurial activity, a large share of funds for basic research should be financed by labor taxation and a minor share is left to profit taxation. Such tax schemes induce a significant share of agents to become entrepreneurs, thereby rationalizing substantial investments in basic research. These entrepreneurial economies, however, may make a majority of citizens worse off if those individuals do not possess shares of final good producers in the economy. In such circumstances, stagnation may prevail

Human Capital and Long-Run Labor Income Risk

This review article examines the role of labor income risk in determining the value of a person's human capital. We draw on the existing literature to present a model that incorporates various types of shocks to earnings. Within this framework, we highlight the implications of different assumptions about the correlation between market returns and labor income growth for the value of human capital and its riskiness. Further, the article surveys other work that applies similar ideas to assess the value and risk of pension promises. Finally, we discuss how to enrich the environment with heterogeneity in preferences and stock market exposures; endogenous labor supply and retirement decisions; health shocks; and human capital investment