This dissertation consists of three chapters. In the first, I perform an empirical analysis of China’s college expansion policy. First, I estimate the impact of a substantial increase in the college-educated labor supply on the college wage premium. I find that the return to college education is stable within a decade after college expansion. Second, I investigate how college expansion has affected pre-college education expenditure on children and their educational outcomes. The main finding is that the magnitude of the effect depends crucially on parents' socioeconomic backgrounds. In the second chapter, I quantitatively evaluate how China’s public college expansion program impacts human capital investment in children and inequality in the long run. To this end, I introduce a heterogeneous-agent overlapping-generations model in which altruistic parents invest in their children’s pre-college education, which can raise their children’s future working efficiency and their chance of passing the College Entrance Examination. I find that the increases in college attainment, human capital, and ex ante welfare are substantial but unevenly distributed, with disadvantaged children benefiting the least from the existing policy. The simulation also reveals that the reason for the unequal outcomes is that college expansion primarily incentivizes wealthy parents to spend more on their children’s education, which is consistent with the empirical evidence. Finally, the third chapter (joint with Lichen Zhang) studies the driving forces behind the decline in the formation of new businesses in the U.S. since the 1980s and investigates their macroeconomic implications. We devote our attention to two forces: changes in entry costs and the persistence of shocks to productivity. We develop a quantitative general equilibrium model of entrepreneurship to identify and quantify their relative importance in explaining the observed declines in new business creation. We find that the relative contribution of higher entry cost is 1.5 to 2 times larger than that of the higher persistence of shocks. Moreover, the increases in entry cost have compelled entrepreneurs to pay 15% more in terms of their first year's profit to start a business.