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Two essays on entrepreneurship, bankruptcy and employment concentration, and a detour on homelessness

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dc.contributor.authorCorreas, Ignacio Maria, author
dc.contributor.authorWeiler, Stephan, advisor
dc.contributor.authorAlves Pena, Anita, committee member
dc.contributor.authorBernasek, Alexandra, committee member
dc.contributor.authorBajtelsmit, Vickie, committee member
dc.date.accessioned2024-09-09T20:52:09Z
dc.date.available2026-08-16
dc.date.issued2024
dc.description.abstractThis doctoral thesis is composed of two chapters that attempt to explain some of the causes for the decline of entrepreneurship in the United States since the late 1980s, and a third chapter the motivation for which arose while researching the other two. Chapter one looks at the laws protecting certain assets from repossession in the event of personal bankruptcy and their possible influence on entrepreneurship. As the US Supreme Court has repeatedly held that the raison d'ĂȘtre behind the bankruptcy statutes is to provide individuals with an unencumbered "fresh-start" in life, and that this is done both to promote entrepreneurship and for "humanitarian reasons", it was only logical to follow up this chapter with another one exploring whether bankruptcy exemptions indeed offer some relief from destitution. This became the second chapter in this dissertation. Lastly, the third chapter circles back to the topic of entrepreneurship and looks at whether the concentration of economic activity (particularly employment) in larger enterprises, as is the case with the US labor market when compared to other OECD countries, has an effect on new business creation. As stated, chapter one looks at how the changes in personal bankruptcy laws from 1986 to 2017 influence entrepreneurship. There are two components of the bankruptcy law explored in this section: its debt forgiveness or "fresh start" provision, and the protection from repossession that it extends to certain personal asset categories. The paper finds that the implementation of the 2005 BAPCPA law restricting access to debt discharge during bankruptcy was the most detrimental to entrepreneurship of the two, being strongly associated with a decrease in firm creation. Asset exemptions from repossession have an impact on entrepreneurship also, and larger (inflation adjusted) protections are paradoxically linked to fewer start-ups in general. However, this chapter also finds that immediately following a statutory increase in the exemption amounts there is a transitory rise in firm creation which only lasts for two years. The final verdict is that when it comes to personal bankruptcy law, it is debt forgiveness that encourages entrepreneurship; property protections offer at best a temporary boost to new firm creation but are in general detrimental to it. Alas, and since humanitarian reasons have historically and legally been recognized as a second premise for the US personal bankruptcy law, might asset protections during bankruptcy at least help in this regard? The second chapter in this dissertation thus looks at the connection between the rate of homelessness in a state and the bankruptcy laws applicable to that state from 2007 to 2017. More generous homestead exemptions are surprisingly found to be associated with a significant increment in the rate of homelessness that is between 26 and 30 per 100,000 people. The wildcard exemption on the other hand (which can be used for any asset category) has an opposite effect: a one percent increment in its amount, when measured as a percentage of median household income, lowers homelessness by 219 to 230 individuals for every 100,000 people. Traditional economic indicators such as growth in per-capita Gross Domestic Product (GDP) have the foreseeable impact on homelessness, which is in fact not as strong as that of the asset protections: each one percent increase in GDP per-capita lowers homelessness by roughly 2 people per 100,000. Surprisingly, protections shielding filers from having their homes being taken away during bankruptcy are associated with increases in homelessness, whereas similar safeguards applicable to any asset, although comparatively smaller in amount, are effective in reducing it. The last chapter in this dissertation goes back to the topic of entrepreneurship, and explores the effect that workforce concentration in large employers, regardless of their nature, may have on new firm creation. As such the paper serves as a test of the 'Chinitz's hypothesis of agglomeration being the catalyst for local economic dynamics, and it is new in its approach in that it looks at total general employment in a given area (instead of focusing on particular industries), and because it takes into consideration the share of the workforce in large employers both in the private and the public sectors. The analysis uses economic and demographic data at the county level; given the possibility of feedback effects between the variables measuring the share of the workforce in large employers and the creation of new business, an instrumental variable approach is utilized for estimation. The findings in this last chapter confirm the Chinitz hypothesis, while also considering the effect of public sector employment on the private economy: concentration of the workforce in large employers, regardless of their nature, is determined to be a crucial driver for the local economy as it relates to entrepreneurship and is in fact deleterious to firm creation. The evidence from these three essays suggests that bankruptcy debt forgiveness fosters entrepreneurship, but asset exemptions from repossession and employment concentration in large organizations negatively affect it. However, exemptions allowing a would-be filer to shield any item of their choice from repossession, even if they are modest in amount compared to other exemption categories, help in reducing homelessness. After all, people do need boots if they are to pull themselves up by their bootstraps, as Dr Martin Luther King once noted.
dc.format.mediumborn digital
dc.format.mediumdoctoral dissertations
dc.identifierCorreas_colostate_0053A_18477.pdf
dc.identifier.urihttps://hdl.handle.net/10217/239253
dc.languageEnglish
dc.language.isoeng
dc.publisherColorado State University. Libraries
dc.relation.ispartof2020-
dc.rightsCopyright and other restrictions may apply. User is responsible for compliance with all applicable laws. For information about copyright law, please see https://libguides.colostate.edu/copyright.
dc.rights.accessEmbargo expires: 08/16/2026.
dc.subjectconcentration
dc.subjectexemption
dc.subjecthomeless
dc.subjectentrepreneurship
dc.subjectbankruptcy
dc.subjectfresh-start
dc.titleTwo essays on entrepreneurship, bankruptcy and employment concentration, and a detour on homelessness
dc.typeText
dcterms.embargo.expires2026-08-16
dcterms.embargo.terms2026-08-16
dcterms.rights.dplaThis Item is protected by copyright and/or related rights (https://rightsstatements.org/vocab/InC/1.0/). You are free to use this Item in any way that is permitted by the copyright and related rights legislation that applies to your use. For other uses you need to obtain permission from the rights-holder(s).
thesis.degree.disciplineEconomics
thesis.degree.grantorColorado State University
thesis.degree.levelDoctoral
thesis.degree.nameDoctor of Philosophy (Ph.D.)

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