Fi­nan­ce Se­mi­nar with Spy­ri­don La­ga­ras

The Department of Finance is proud to announce the upcoming seminar with Spyridon Lagaras, University of Illinois at Urbana-Champaign.

Spyridon Lagaras, will present: Entrepreneurship on a Safety Net: Evidence from the World’s Largest Cash Transfer Program

Abstract: Do social transfer programs promote entrepreneurship among low-income households? We study Brazil’s Bolsa Família using administrative data on 2.3 million sole proprietorships linked to transfer records, employment histories, and taxes. Using Coarsened Exact Matching and fixed effects, we show that municipalities with greater program exposure see more sole-proprietor entry, but no rise in larger firms. Cash-transfer entrepreneurs exhibit lower survival, growth, hiring, and credit access. Their employment practices-hiring less-educated workers at higher wages-suggest managerial constraints yet create positive spillovers. After failure, they obtain worse jobs but experience smaller wage losses. Overall, transfers expand participation but yield subsistence entrepreneurship, not upward mobility.