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Household Wealth and Entrepreneurial Career Choices: Evidence from Climate Disasters

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  • Xiao Cen

Abstract

This study investigates how household wealth affects the human capital of startups, based on U.S. Census individual-level employment data, deed records, and geographic information system (GIS) data. Using floods as a wealth shock, a regression discontinuity analysis shows inundated residents are 7% less likely to work in startups relative to their neighbors outside the flood boundary, within a 0.1-mile-wide band. The effect is more pronounced for homeowners, consistent with the wealth effect. The career distortion leads to a significant long-run income loss, highlighting the importance of self-insurance for human capital allocation.

Suggested Citation

  • Xiao Cen, 2024. "Household Wealth and Entrepreneurial Career Choices: Evidence from Climate Disasters," Working Papers 24-39, Center for Economic Studies, U.S. Census Bureau.
    • Handle: RePEc:cen:wpaper:24-39
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    File URL: https://www2.census.gov/library/working-papers/2024/adrm/ces/CES-WP-24-39.pdf
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    References listed on IDEAS

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