I am a Ph.D. candidate in finance at The Wharton School, University of Pennsylvania. Before joining Wharton, I received a B.Sc. in Physics and a M.Sc. in Economics from Sharif University of Technology.
During my Ph.D. studies at Wharton, I have done empirical and theoretical research on how finance impacts income and social inequalities. My job market paper studies the connection between student loans and social mobility. I quantify the impact of external-financing frictions on differences in educational attainment between students from low- and high-income backgrounds. I evaluate alternatives to student debt, such as making public colleges tuition-free.
I will be available for virtual interviews during the European Job Market for Economists, December 14 – 18, 2020, and the AFA Annual Meeting, January 3 – 5, 2021.
Abstract: Students from poor families invest much less in college education than do rich families. To analyze this gap, I assess the role of financial frictions and subsidy schemes using a structural estimation fit to a novel representative dataset of US college students. I propose an identification strategy that relies on bunching on federal Stafford loan limits and differences between in- and out-of-state tuition. I find that the investment gap is mainly due to fundamental factors—heterogeneity in preparedness for college and the value-added of college—rather than financing constraints for lower-income students. Making public colleges tuition-free substantially reduces student debt, but disproportionately benefits wealthier students, and entails nearly $20B deadweight loss per year through distorting college choices. Expanding Pell grants, however, benefits low-income students at a much lower cost.
Abstract: What is the connection between financing constraints and the equity premium? To answer this question, we build a model with inalienable human capital, in which investors decide to finance individuals who can potentially become skilled. Though investment in skill is always optimal, it does not take place in some states of the world, due to moral hazard. In other states of the world, individuals acquire skill; however outside investors and individuals inefficiently share risk. We show that this simple moral hazard problem and the resultant financing friction leads to a realistic equity premium, a low risk riskfree rate, and severe negative consequences for distribution of wealth and for welfare. When investment fails to take place, the economy enters an endogenous disaster state. We show that the possibility of these disaster states distorts risk prices, even under calibrations in which they never occur in equilibrium.
Abstract: What is the social impact of the financial intermediation sector? I analyze the aggregate and the redistribution impact of financial intermediaries in an economy with a set of potential entrepreneurs. The intermediation sector endogenously develops to relax credit constraints by monitoring a borrowing entrepreneur. Competitive intermediaries i) eradicate non-fundamental-based income inequality by spreading economic opportunity to financially constrained individuals—the redistribution impact, and ii) boost entrepreneurship and restore the socially optimal occupational pattern—the job-creation impact. Although the job-creation impact is socially beneficial, the redistribution impact is not—social surplus declines overall due to a pecuniary externality associated with the redistribution function of the financial intermediation sector. Monopoly intermediation limits the redistribution impact and may raise the utilitarian welfare.
Mehran Ebrahimian and Seyed Mohammad Mansouri Credit Supply and Entrepreneurship in Low-Income Regions.
Abstract: How does financial friction influence gains from trade? To answer this question, this paper develops a general equilibrium model of international trade with cross-country financial friction heterogeneity, as the source of comparative advantage. Although product markets are competitive, production of firms in finance-dependent sectors of a closed economy is supported by a markup over marginal cost, so that a higher profit prevents firms from strategically defaulting on loans. Trade liberalization reduces the price of the finance-dependent good, which benefits the consumers; however, economic rents of producing finance-dependent goods flow out to the financially less-frictional economy, which is welfare-reducing. In sum, gains/losses from trade is determined by the financing friction severity of the partner country. We test the empirical predictions of the model. In particular, while we show that financial development matters for the growth of finance-dependent industries in open economies, we do not find such an evidence for closed economies.