UCSB economics

 
 

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Selected working papers

 
     

pdf Random Choice and Market Demand

Abandon the behavioral model of choice. Consider, instead, a statistical (i.e., "irrational") model of choice. Consumption is randomly chosen and there are no preferences and/or maximizing behavior. Market demands are shown to generally satisfy all the properties of the behavioral model of choice, including symmetry and negative semidefiniteness of the Slutsky matrix. The theory's value-added is illustrated in a number of applications: the findings serve to characterize market demands for descriptive individual choice behaviors representable by choice probabilities; they also demonstrate the inconsistency of statistical tests of revealed preference theory.

 
     

pdf Disease and Diversity in Long-term Economic Development

Ethnographic data on large and impressive structures and archeological censuses of cities strongly suggest that pre-colonial societies in sub-Saharan Africa lacked widespread state-consolidated power typical of large tributary empires such as those of pre-colonial tropical America. Ethnographic data also suggest that disease (i.e., environmentally-determined pathogen stress) was a significant factor in limiting pre-colonial economic development and state consolidation partly through a promoting of ethnic diversity. The effects of disease on economic development and ethnic diversity persist for a long time; pre-colonial factors continue to determine current income per capita and current indices of ethnolinguistic fractionalization.

 
     

pdf A Competitive Theory of Mismatch

This paper studies a general equilibrium island model of mismatch and examines the stationary properties of the equilibrium. Aggregate demand is uncertain and market participants cannot instantaneously adjust to changes in demand. Changes in technological and demand conditions trigger capital and labor reallocations that increase aggregate unemployment and vacancies. Mismatch increases due to higher dispersion of unemployment and vacancies across locations, and because the number of unemployed workers and vacant jobs in different locations increases. The theory provides an explanation for the shifts in the Beveridge curve consistent with microeconomic evidence on labor market dispersion.

 
     

pdf Demography and Development Redux

The effects of population growth on long-term economic development are obviously important. Existing studies, notably Kremer (1993), argue that population growth spurs technological change. This paper introduces previously untested growth predictions of Kremer's (1993) model, and assesses the sensitivity of existing findings using numerous alternative data sources, empirical specifications, and sample periods. I find that excluding modern data reverses existing time series conclusions. Inferences drawn from the melting of the ice caps are also reversed when appropriate controls are taken into account. A leapfrogging model is briefly discussed as a competing framework to study demographic and technological change.

 
     

pdf Education, Birth Order, and Family Size (with Jesper Bagger, Hani Mansour, and Sergio Urzúa)

We introduce a general framework to analyze the trade-off between education and family size. Our framework incorporates parental preferences for birth order and delivers theoretically consistent birth order and family size effects on children's educational attainment. We develop an empirical strategy to identify these effects. We show that the coefficient on family size in a regression of educational attainment on birth order and family size does not identify the family size effect as defined within our framework, even when the endogeneity of both birth order and family size are properly accounted for. Using Danish administrative data we test the theoretical implications of the model. The data does not reject our theory. We find significant birth order and family size effects in individuals' years of education thereby confirming the presence of a quantity-quality trade off.

 
     

pdf Taking versus Taxing: An Analysis of Conscription in a Private Information Economy (with Tom Koch)

Most countries currently man their militaries through conscription (i.e., a draft). Conventional wisdom suggests that, by lowering the budgetary cost of the military, a draft reduces distortionary taxation, especially when military needs are large. We study conscription in a private information economy with heterogeneous civilian and military abilities. We find that voluntary enlistments leave more high-income earners in the civilian sector, leading to a larger tax base. When income taxes are set optimally, voluntary enlistments lead to less distortionary taxation than a draft. Drafts are more distortionary (and less socially desirable) when military needs are large.

 
     

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Selected publications

pdf "Gallantry in Action": Evidence of Advantageous Selection in a Volunteer Army (with Tom Koch), Journal of Law and Economics, 2015, forthcoming.

pdf Agricultural Productivity, Structural Change, and Economic Growth in Post-Reform China (with Kang Hua Cao), Journal of Economic Development, 2013, Vol. 104(September), 165-180.

pdf Airborne Diseases: Tubercolusis in the Union Army, Explorations in Economic History, 2011, Vol. 48(2), 325-342.

pdf Altruism, Fertility, and the Value of Children: Health Policy Evaluation and Intergenerational Welfare (with Rodrigo Soares), 2009, Journal of Public Economics, Vol. 93(1-2), 280-295.

pdf Equilibrium, Convergence, and Capital Mobility in Neoclassical Models of Growth, 2008, Economics Letters, Vol. 99(1), 10-13.

pdf Escaping High Mortality, 2007, Journal of Economic Growth, Vol. 12(4), 351-387.

pdf Economic Development and the Escape from High Mortality, 2007, World Development, Vol. 35(4), 543-568.

pdf Income Distribution and Macroeconomics in Colombia, 2007, Journal of Income Distribution, Vol. 16(2), 6-24.

pdf Capital Accumulation, Unemployment, and the Putty-Clay, 2004, Economics Bulletin, Vol 5(19), 1-8.

pdf Income Distribution, Human Capital, and Economic Growth in Colombia, 2001, Journal of Development Economics, Vol. 66(1), 271-287.

 
     

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Old working papers

pdf Growth and Unemployment (without market frictions)