Why do some people become entrepreneurs, how do institutions affect this choice, and how does this affect the firm size distribution and aggregate productivity? This paper addresses this question using a matching model with occupational choice and heterogeneity in both ability as a worker and ex...

Why do some people become entrepreneurs (and others don't)? Why are firms so heterogeneous, and many firms so small? To start, the paper briefly documents evidence from the empirical literature that the relationship between entrepreneurship and education is Ushaped; that many entrepreneurs start a...

This paper provides new theory and evidence on the relationship between ability and entrepreneurship. I show that there is a U-shaped relationship between the probability of entrepreneurship and both a person's schooling and wage when employed. This pattern can be explained in a model of...

This paper evaluates the size of these effects when distortions affect not only resource allocation but also the evolution of firm level productivity itself. To this end, we partially endogenize the evolution of firm level productivity in a standard heterogeneous firm model by allowing firms to...