University of Chicago
Booth School of Business
5807 South Woodlawn Avenue
Chicago, IL 60637
Harper Center HC431

For appointments please contact:
Jessica Henderson
University of Chicago
Booth School of Business
5807 South Woodlawn Avenue
Chicago, IL 60637


I study the interaction between public policy and corporate behavior, with a focus on fiscal stimulus, taxation, and housing policy. My research draws insights from finance and behavioral economics while using a variety of methods: new data, natural experiments, theory, and anecdotal exploration. I'm particularly interested in the problems that small and medium-sized private firms and new ventures face, from the perspective of owners, investors, managers, and workers. A secondary area of interest concerns the role of bounded rationality and imperfect information in the design of policies that promote behavior change. This work focuses on determinants of habit formation in health and workforce productivity settings.

I earned a Ph.D. and M.A. in business economics from Harvard University and a B.A. in economics and mathematics with high honors from Swarthmore College. Prior to grad school, I worked as a research assistant at the National Bureau of Economic Research and as a web and software developer for several start-ups and non-profits. In college, I captained the golf team and played lead guitar in a very mediocre rock band called Paul and the Bond Squad. After college, I played in a better band called The Horse Latitudes.

For more information, please see my CV.

If you are an undergrad or graduate student looking for RA work, please contact me with a resume and short cover letter stating fields of interest. Remote and flexible work options are available.


Working Papers
  • Top Wealth in the United States: New Estimates and Implications for Taxing the Rich
    (with Matthew Smith and Owen Zidar), Preliminary.
    Manuscript (7/2019)

    Abstract: This paper uses administrative tax data to estimate top wealth in the United States. We build on the capitalization approach in Saez and Zucman (2016) while accounting for heterogeneity within asset classes when mapping income flows to wealth. Our approach reduces bias in wealth estimates because wealth and rates of return are correlated. Overall, wealth is very concentrated: the top 1% holds as much wealth as the bottom 90%. However, the "P90-99" class holds more wealth than either group after accounting for heterogeneity. Relative to a top 0.1% wealth share of more than 20% under equal returns, we estimate a top 0.1% wealth share of [15%] and find that the rise since 1980 in top wealth shares falls by [half]. Top portfolios depend less on fixed income and public equity, depend more on private equity and housing, and more closely match the composition reported in the SCF and estate tax returns. Our adjust- ments reduce mechanical revenue estimates from a wealth tax and top capital income shares in distributional national accounts, which depend on well-measured estimates of top wealth. Though the capitalization approach has advantages over other methods of estimating top wealth, we emphasize that considerable uncertainty remains inherent to the approach by showing the sensitivity of estimates to different assumptions.

  • Speculative Dynamics of Prices and Volume
    (with Anthony A. DeFusco and Charles G. Nathanson), R&R, Journal of Finance
    Manuscript (4/2018) | NBER #23449

    Abstract: We present a dynamic theory of prices and volume in housing cycles. In our framework, predictable price increases endogenously attract short-term buyers more strongly than long-term buyers. Short-term buyers amplify volume by selling more frequently, and they destabilize prices through positive feedback. Our model predicts a lead-lag relationship between volume and prices, which we confirm in the 2000-2011 U.S. housing bubble. Using data on 50 million home sales from this episode, we document that much of the variation in volume arose from the rise and fall in short-term investment.

  • The Costs of Corporate Tax Complexity
    R&R, American Economic Journal: Economic Policy
    Manuscript (7/2018) | NBER #24382

    Abstract: Does tax code complexity alter corporate behavior? We investigate this question by studying the decision to claim refunds for tax losses. In a sample of 1.2M observations from the population of corporate tax returns, only 37% of eligible firms claim their refund. A simple cost-benefit analysis of the tax loss choice cannot explain low take-up, motivating an exploration of how complexity alters this calculation. Research designs exploiting tax preparer switches, deaths, and relocations show that sophisticated preparers increase claim rates for small firms. Complexity decreases take-up among large firms through interactions among tax code provisions and with the audit process.
        Replaces "The Role of Experts in Fiscal Policy Transmission" and "Do Experts Help Firms Optimize?"

  • Kinky Tax Policy and Abnormal Investment Behavior
    (with Qiping Xu), R&R, Journal of Finance
    Manuscript (8/2018)

    Abstract: This paper documents tax-minimizing investment, in which firms accelerate capital purchases near fiscal year-end to reduce taxes. Between 1984 and 2013, average investment in fiscal Q4 exceeds the average of fiscal Q1 through Q3 by 37%. Q4 spikes also occur internationally. Research designs using variation in firm tax positions and the 1986 Tax Reform Act show that tax minimization causes spikes. Spikes increase when firms face financial constraints or higher option values of waiting. We develop an investment model with tax asymmetries to rationalize these patterns. Models without purchase-year, tax-minimization motives are unlikely to fit the data.

    • Charles River Associates Award for Best Corporate Finance Paper, WFA, 6/2017
    • Best Conference Paper Award, Colorado Finance Summit, 1/2017
Heavily Refereed Papers
  • Capitalists in the Twenty-First Century
    (with Matthew Smith, Danny Yagan, and Owen Zidar), Quarterly Journal of Economics, Forthcoming.
    Manuscript (6/2019) | NBER #25442

    Abstract: How important is human capital at the top of the U.S. income distribution? A primary source of top income is private "pass-through" business profit, which can include entrepreneurial labor income for tax reasons. This paper asks whether top pass-through profit mostly reflects human capital, defined as all inalienable factors embodied in business owners, rather than financial capital. Tax data linking 11 million firms to their owners show that top pass-through profit accrues to working-age owners of closely-held, mid-market firms in skill-intensive industries. Pass-through profit falls by three-quarters after owner retirement or premature death. Classifying three-quarters of pass-through profit as human capital income, we find that the typical top earner derives most of her income from human capital, not financial capital. Growth in passthrough profit is explained by both rising productivity and a rising share of value added accruing to owners.

  • Stimulating Housing Markets
    (with David Berger and Nicholas Turner), Journal of Finance, Forthcoming.
    Manuscript (1/2019) | NBER #22903

    Abstract: We study temporary fiscal stimulus designed to support distressed housing markets by inducing demand from buyers in the private market. Using difference-in-differences and regression kink research designs, we find the First-Time Homebuyer Credit caused home sales to increase 490,000 (9.8%) nationally, median home prices to increase $2,400 (1.1%) per standard deviation increase in program exposure, and the transition rate into homeownership to increase by 53%. The policy response did not reverse immediately. Instead, demand comes from several years in the future: induced buyers were three years younger in 2009 than first-time buyers in other years. The program’s market-stabilizing benefits likely exceeded its direct stimulus effects.

  • Arrested Development: Theory and Evidence of Supply-Side Speculation in the Housing Market
    (with Charles Nathanson), Journal of Finance, 73(6): 2587-2633, 2018.
    Manuscript | Online Appendix | NBER #23030 | Homebuilder Data | Replication Code & Data

    Abstract: This paper studies the role of disagreement in amplifying housing cycles. Speculation is easier in the land market than in the housing market due to frictions that make renting less efficient than owner-occupancy. As a result, undeveloped land both facilitates construction and intensifies the speculation that causes booms and busts in house prices. This observation reverses the standard intuition that cities where construction is easier experience smaller house price booms. It also can explain why the largest house price booms in the United States between 2000 and 2006 occurred in areas with elastic housing supply.

  • Tax Policy and Heterogeneous Investment Behavior
    (with James Mahon), American Economic Review, 107(1): 217-48, 2017.
    Manuscript | Online Appendix | Slides | NBER #21876 | Industry Exposure Data | Replication Code

    Abstract: We estimate the effect of temporary tax incentives on equipment investment using shifts in accelerated depreciation. Analyzing data for over 120,000 firms, we present three findings. First, bonus depreciation raised investment in eligible capital relative to ineligible capital by 10.4% between 2001 and 2004 and 16.9% between 2008 and 2010. Second, small firms respond 95% more than big firms. Third, firms respond strongly when the policy generates immediate cash flows but not when cash flows only come in the future. This heterogeneity materially affects investment-weighted estimates and supports models in which financial frictions or fixed costs amplify investment responses.
        Replaces "Do Financial Frictions Amplify Fiscal Policy? Evidence from Business Investment Stimulus"

    • Best Paper at Oxford Centre for Business Taxation Doctoral Conference, 9/2013
  • Opting Out of Good Governance
    (with C. Fritz Foley, Paul Goldsmith-Pinkham, and Jonathan Greenstein), Journal of Empirical Finance, 46, 93-110, 2018.
    Manuscript | NBER #19953

    Abstract: Cross-listing on a U.S. exchange does not bond foreign firms to follow the corporate governance rules of that exchange. Hand-collected data show that 80% of cross-listed firms opt out of at least one exchange governance rule. Relative to firms that comply, firms that opt out have a smaller share of independent directors. Cross-listed firms opt out more when coming from countries with weak corporate governance rules, but if firms based in such countries are growing and have a need for external finance, they are more likely to comply. For firms in such countries, opting out also lower valuations, decreases the value of cash holdings, and reduces investment sensitivity to market valuations.

Lightly Refereed Papers
  • Business in the United States: Who Owns It and How Much Tax Do They Pay?
    (with Michael Cooper, John McClelland, James Pearce, Richard Prisinzano, Joseph Sullivan, Danny Yagan, and Owen Zidar), Tax Policy and the Economy, 30(1), 91-128, 2016.
    Manuscript | Slides | NBER #21651 | Data

    Abstract: "Pass-through" businesses like partnerships and S-corporations now generate over half of U.S. business income and account for over half of the post-1980 rise in the top-1% income share. We use administrative tax data from 2011 to identify pass-through business owners and estimate how much tax they pay. We present three findings. (1) Relative to traditional business income, pass-through business income is substantially more concentrated among high-earners. (2) Partnership ownership is opaque: 20% of the income goes to unclassifiable partners, and 15% of the income is earned in circularly owned partnerships. (3) The average federal income tax rate on U.S. pass-through business income is 19%—much lower than the average rate on traditional corporations. If pass-through activity had remained at 1980's low level, strong but straightforward assumptions imply that the 2011 average U.S. tax rate on total U.S. business income would have been 28% rather than 24%, and tax revenue would have been at least $100 billion higher.

Unpublished Papers
  • Regulators vs. Zombies: Loss Overhang and Lending in a Long Slump
    (Manuscript available upon request)

    Abstract: Why are economic recoveries following financial crises so sluggish? This paper presents micro-level evidence that, in the recovery from the U.S. Great Recession, loss overhang in the banking sector restricted lending and slowed growth. Zombie banks suffer from a debt overhang problem caused by unrealized losses on past loans. To deter regulatory action, zombies restrict new lending in healthy categories, prop up lending in unhealthy categories, and overallocate to safe, liquid assets. FDIC-induced failures allow zombies to hive off bad loans and as a result lending resumes post resolution. In the slump that began in the United States in 2007, limited FDIC liquidity and manpower prevented it from a timely reboot of all zombie balance sheets. As a consequence, counties afflicted with unhealed zombies displayed a slower recovery in employment, even in tradable goods industries less subject to local demand conditions.


Public Goods


While in grad school, I participated in a few panels on grad student life. I condensed my notes and the wisdom of many wonderful advisers into these one-page HOWTOs. People have found them useful, or at least amusing. They are living documents, so constructive comments are very welcome.

The Twelve Step Program for Grad School
A guide to doing research and finishing. (8/2013)

How I Learned to Stop Worrying and Love the Job Market
A survival strategy for the job market. (4/2014)


New Directions in Business Tax Research
Short course prepared for National Tax Association meeting, sponsored by the Michigan Office of Tax Policy Research. (11/2018)


This is a bibliography style file designed to fight the scourge of alphabetical discrimination by ridding working papers of the "et al" abbreviation. Danny Yagan is the architect. Replace your .bst file with this file to spell out the first ten names in an author list.

Heatmaps for Economic Analysis
This is a Stata wrapper for the R module that produces heatmap visualizations. TianFang (Tom) Cui is the project architect. For an example heatmap applied to a difference-in-differences research design, see Figure 5 in Stimulating Housing Markets. (10/2016)
Github Repository | Slides | Package as .zip

Web Calculator for Optimal Mortgage Refinancing
A supplement to NBER #13487 by Agarwal, Driscoll, and Laibson. (10/2007)