Research Seminars @ Illinois

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Tailored for undergraduate researchers, this calendar is a curated list of research seminars at the University of Illinois. Explore the diverse world of research and expand your knowledge through engaging sessions designed to inspire and enlighten.

To have your events added or removed from this calendar, please contact OUR at ugresearch@illinois.edu

Speaker Margaret Jodlowski - Risk and Capital-Labor Allocation: Evidence from Large-Scale Government Insurance

Event Type: Seminar/Symposium
Sponsor: ACE (Dept of Agricultural and Consumer Economics)
Location: 428 Mumford Hall
Virtual: Join online
Date: Sep 26, 2025 12:00 - 1:00 pm
Speaker: Dr. Margaret Jodlowski, Assistant Professor, Ohio State University
Views: 28
Originating Calendar: ACE Seminars; Abstract
This study shows that uninsured risk is a driver of within-firm factor input misallocation, even in a context with near-complete factor and credit markets. Using operation-level microdata from the U.S. agricultural sector and regulatory thresholds for identification, we find that increases in insurance use allow operations to increase physical capital investment and reduce total labor use. Our analysis of enterprise value suggests that this reallocation is value-enhancing and is driven by changes in each factor's returns. The decline in total labor use is due to a reduction in supplemental labor; managerial labor increases. Operations fund capital investments using internal savings rather than external capital, implying that reducing cash flow risk, not financial constraints or a declining cost of capital, is the channel through which insurance spurs these changes. Our results identify a significant economic cost of risk and highlight a key benefit of government-sponsored insurance.

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