Leonardo Indraccolo

Leonardo Indraccolo

PhD Candidate in Economics

European University Institute

Hi! Welcome to my website.

I am a PhD Candidate in Economics at the European University Institute in Florence.

I will join the Economist Program of the International Monetary Fund in September 2024.

Research areas: Quantitative Macroeconomics with a focus on Firm Dynamics and Productivity, Entrepreneurship and Taxation.

  • Quantitative Macroeconomics
  • Firm Dynamics
  • Entrepreneurship
  • Business Formation
  • Taxation



Working Papers:

  • Entrepreneurship, Human Capital and Wealth
      Current Draft   (with Jacek Piosik )

    This paper studies how financial constraints and human capital accumulation interact in shaping entrepreneurial decisions. We use Danish administrative data to provide new evidence on the role that human capital accumulation plays for selection into entrepreneurship. We show that entrepreneurs, compared to workers of the same age, on average i) earned higher wages before starting their business ii) experienced higher growth rates in wages iii) have more years of education and labor market experience. We account for our empirical findings in a quantitative general equilibrium life-cycle model and use it to analyze how human capital accumulation and financial constraints jointly determine i) the life-cycle patterns of entry into entrepreneurship ii) the productivity of businesses started at different stages of an individual's life-cycle and how they interact in affecting aggregate TFP and resource mis-allocation. Through counterfactual exercises we establish how most efficiency losses due to the presence of financial frictions stem from the fact that high human capital entrepreneurs run undercapitalized businesses, rather than high human capital individuals not selecting into entrepreneurship. We conclude by using the calibrated model to quantify the efficiency and welfare effects of a tax policy reform aimed at incentivizing business creation by young individuals.

  • Teach the Nerds to Make a Pitch: Multidimensional Skills and Selection into Entrepreneurship
      Current Draft   (with Damiano Argan and Jacek Piosik )

    Using danish administrative data, in this paper we study how individuals' skill set composition affects self-selection into entrepreneurship. We use detailed education registry data on high school grades in math and danish language to measure analytical and communication skills. We show that highly specialized skill sets are rewarded on the labor market in terms of higher wages, but are negatively related to the probability of becoming an entrepreneur. We also find that for students with high math grades in high school the probability of starting a business is monotonically increasing in their oral grade in Danish, while it is not so for the rest of the population. Motivated by the evidence that students performing well in math run on average more profitable and bigger businesses, we propose an identification strategy to casually estimate the effect of skill multidimensionality on the probability of becoming an entrepreneur. For the population of high performing math students we use information on parents' human capital and exploit within-school, across-cohort variation in students' exposure to peers whose father has a university degree in humanities. We find that the most treated individual (90th percentile) in our sample has 1.1 percentage points higher probability of becoming an entrepreneur compared to the least treated one (10th percentile). The effect is economically significant, being equal to 20% of the overall share of entrepreneurs in the economy. We conclude by highlighting the importance of improving communication skills of individuals with high analytical abilities to incentivize the creation of high performing firms.