Joseph P. Kaboski

The Ohio State University, Columbus, Ohio, United States

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Publications (29)15.44 Total impact

  • Brian Greaney, Joseph P. Kaboski, Eva Van Leemput
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    ABSTRACT: This paper examines a cost-reducing innovation to the delivery of Self-Help Group microfinance services. These groups typically rely on outside agents to found and administer the groups although funds are raised by the group members. The innovation is to have the agents earn their payment by charging membership fees rather than following the status quo in which the agents are paid by an outside organization and instead offer free services to clients. The theory we develop shows that such membership fees could actually improve performance without sacrificing membership, simply by mitigating an adverse selection problem. Empirically, we evaluate this innovation in East Africa using a randomized control trial. We find that privatized entrepreneurs providing the self-help group services indeed outperform their NGO-compensated counterparts along several dimensions. Over time, they cost the NGO less and lead more profitable groups; also, households with access to privately-delivered groups borrow and save more, invest more in businesses, and may have higher consumption. Consistent with the theory, these privatized groups attract wealthier, more business-oriented members, although they attract no fewer members.
    04/2013;
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    ABSTRACT: The large, persistent fluctuations in international trade that can not be explained in standard models by changes in expenditures and relative prices are often attributed to trade wedges. We show that these trade wedges can reflect the decisions of importers to change their inventory holdings. We find that a two-country model of international business cycles with an inventory management decision can generate trade flows and wedges consistent with the data. Moreover, matching trade flows alters the international transmission of business cycles. Specifically, real net exports become countercyclical and consumption is less correlated across countries than in standard models. We also show that ignoring inventories as a source of trade wedges substantially overstates the role of trade wedges in business cycle fluctuations.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
    05/2012;
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    Joseph P Kaboski, Robert M Townsend
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    ABSTRACT: This paper evaluates the short-term impact of Thailand's 'Million Baht Village Fund'program, among the largest scale government microfinance iniative in the world, using pre- and post-program panel data and quasi-experimental cross-village variation in credit-per-household. We find that the village funds have increased total short-term credit, consumption, agricultural investment, income growth (from business and labor), but decreased overall asset growth. We also find a positive impact on wages, an important general equilibrium effect. The findings are broadly consistent qualitatively with models of credit-constrained household behavior and models of intermediation and growth.
    American Economic Journal Applied Economics 04/2012; 4(2):98-133. · 2.76 Impact Factor
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    Joseph P Kaboski, Robert M Townsend
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    ABSTRACT: This paper uses a structural model to understand, predict, and evaluate the impact of an exogenous microcredit intervention program, the Thai Million Baht Village Fund program. We model household decisions in the face of borrowing constraints, income uncertainty, and high-yield indivisible investment opportunities. After estimation of parameters using pre-program data, we evaluate the model's ability to predict and interpret the impact of the village fund intervention. Simulations from the model mirror the data in yielding a greater increase in consumption than credit, which is interpreted as evidence of credit constraints. A cost-benefit analysis using the model indicates that some households value the program much more than its per household cost, but overall the program costs 20 percent more than the sum of these benefits.
    Econometrica 09/2011; 79(5):1357-1406. · 3.82 Impact Factor
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    Francisco J Buera, Joseph P Kaboski, Yongseok Shin
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    ABSTRACT: This paper provides a quantitative evaluation of the aggregate and distributional impacts of economy-wide microfinance or credit programs targeted toward small-scale businesses. In our analysis, we find that the redistributive impacts of microfinance are stronger in general equilibrium than in partial equilibrium, but the aggregate impacts are smaller. Making the typical microfinance program more widely available has only a small impact on per-capita income, since an increase in aggregate total factor productivity (TFP) is offset by lower capital accumulation that stems from the redistribution of income from high-saving individuals to low-saving ones. However, the vast majority of the population are positively impacted by microfinance, but only through the equilibrium increase in wages.
    04/2011;
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    ABSTRACT: We examine the source of the large fall and rebound in US trade in the recent recession. While trade fell and rebounded more than expenditures or production of traded goods, we find that relative to the magnitude of the downturn, these trade fluctuations were in line with those in previous business cycle fluctuations. We argue that the high volatility of trade is attributed to more severe inventory management considerations of firms involved in international trade. We present empirical evidence for autos as well as at the aggregate level that the adjustment of inventory holdings help explain these fluctuations in trade.
    American Economic Review 01/2011; 101(3):303-07. · 2.69 Impact Factor
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    ABSTRACT: This paper examines the role of inventories in the decline of production, trade, and expenditures in the United States in the economic crisis of late 2008 and 2009. Empirically, the paper shows that international trade declined more drastically than trade-weighted production or absorption and there was a sizable inventory adjustment. This is most clearly evident for automobile, the industry with the largest drop in trade. However, relative to the magnitude of the U.S. downturn, these movements in trade are quite typical. The paper develops a two-country general equilibrium model with endogenous inventory holdings in response to frictions in domestic and foreign transactions costs. With more severe frictions on international transactions, in a downturn, the calibrated model shows a larger decline in output and an even larger decline in international trade, relative to a more standard model without inventories. The magnitudes of production, trade, and inventory responses are quantitatively similar to those observed in the current and previous U.S. recessions.
    IMF Economic Review 01/2010; 58. · 2.10 Impact Factor
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    Joseph P. Kaboski
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    ABSTRACT: Growth accounting exercises using standard human capital measures are limited in their ability to attribute causal effects and to explain growth. This paper develops a model of growth and schooling consistent with these decompositions but with less unexplained growth. The theory distinguishes between three different sources of education gains: (1) supply shifts, (2) skill-biased technical change increasing demand within industries/occupations, and (3) skill-biased technical change caused by the introduction of new skill-intensive industries/occupations. The third source leads to the large sectoral shifts and the largest growth effects. Quantitatively, schooling contributions account for 24 percent of wage growth, with both the direct (i.e., supply driven) causal contribution of schooling and the indirect causal (i.e., technology induced) contribution playing substantial roles. (Copyright: Elsevier)
    Review of Economic Dynamics 02/2009; 12(1):168-182. · 1.36 Impact Factor
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    Francisco J. Buera, Joseph P. Kaboski
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    ABSTRACT: Two traditional explanations for structural changes are sector-biased technological progress and non-homothetic preferences. This paper integrates both into an otherwise standard growth model and quantitatively evaluates them vis-a-vis time series. The exercise identifies a set of puzzles for standard theories: (i) the model cannot account for the steep decline in manufacturing and rise in services in the later data; (ii) the standard model requires implausibly low elasticity of substitution across goods to match the consumption and output data; and (iii) the behavior of consumption and output shares differs significantly from that of employment shares. We argue that models that incorporate home production, sector-specific factor distortions, and differences across sectors in the accumulation of human capital are promising avenues to amend the standard models. (JEL: O11, O14, O41) (c) 2009 by the European Economic Association.
    Journal of the European Economic Association 01/2009; 7(2-3):469-477. · 1.36 Impact Factor
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    ABSTRACT: In this paper, I present empirical evidence for …ve European countries (Germany, France, UK, Spain and Italy) and the Euro-zone on whether monetary policy shocks produce di¤erent e¤ects on real output growth depending on the phase of the business cycle that the economy is undergoing (the socalled ‘state’ asymmetry). To do so, I apply a multivariate extension of the Hamilton(1989)’s Markov switching methodology. I …nd evidence in favour of ‘state’ asymmetries at the aggregate level in all the countries whereby interest-rate shocks have larger e¤ects in recessions than in expansions. I also carry out the analysis at the sectorial level and observe that this asymmetric effect seems to be di¤erent in the analysed countries when I focus on a sectorial analysis.
    National Bureau of Economic Research, Inc, NBER Working Papers. 01/2009;
  • Joseph P. Kaboski
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    ABSTRACT: Stata files to extract data from IPUM (www.ipums.umn.edu), as well as Matlab files for simulations in the paper.
    02/2008;
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    ABSTRACT: Fixed transaction costs and delivery lags are important costs of international trade. These costs lead firms to import infrequently and hold substantially larger inventories of imported goods than domestic goods. Using multiple sources of data, we document these facts. We then show that a parsimoniously parameterized model economy with importers facing an (S, s)-type inventory management problem successfully accounts for these features of the data. Moreover, the model can account for import and import price dynamics in the aftermath of large devaluations. In particular, desired inventory adjustment in response to a sudden, large increase in the relative price of imported goods creates a short-term trade implosion, an immediate, temporary drop in the value and number of distinct varieties imported, as well as a slow increase in the retail price of imported goods. Our study of 6 current account reversals following large devaluation episodes in the last decade provide strong support for the model’s predictions.
    02/2008;
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    George Alessandria, Joseph Kaboski
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    ABSTRACT: Looking around the world, we observe substantial differences across countries in prices for most goods. These price differences also tend to be positively correlated with income differences, so that citizens of high-income countries tend to pay more for the same goods than citizens in low-income countries. In “Why Are Goods So Cheap in Some Countries?,” George Alessandria and Joseph Kaboski summarize some of the evidence related to the big price differences across countries for a broad set of goods. They then discuss the relationship between prices and income levels and some possible explanations for that relationship.
    Business Review. 01/2008;
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    Francisco J. Buera, Joseph Kaboski
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    ABSTRACT: This paper provides a survey on studies that analyze the macroeconomic effects of intellectual property rights (IPR). The first part of this paper introduces different patent policy instruments and reviews their effects on R&D and economic growth. This part also discusses the distortionary effects and distributional consequences of IPR protection as well as empirical evidence on the effects of patent rights. Then, the second part considers the international aspects of IPR protection. In summary, this paper draws the following conclusions from the literature. Firstly, different patent policy instruments have different effects on R&D and growth. Secondly, there is empirical evidence supporting a positive relationship between IPR protection and innovation, but the evidence is stronger for developed countries than for developing countries. Thirdly, the optimal level of IPR protection should tradeoff the social benefits of enhanced innovation against the social costs of multiple distortions and income inequality. Finally, in an open economy, achieving the globally optimal level of protection requires an international coordination (rather than the harmonization) of IPR protection.
    Federal Reserve Bank of Chicago, Working Paper Series. 01/2008;
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    Joseph Kaboski, Trevon D. Logan
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    ABSTRACT: The existing literature on skill-biased technical change has not considered how the technological endowment itself plays a role in the returns to skill. This paper constructs a simple model of skill biased technical change which highlights the role that resource endowments play in the returns to education. The model predicts variation in returns to education with skill biased technological change if there is significant heterogeneity in resource endowments before the technological change. Using a variety of historical sources, we document the heterogeneous technology levels by region in the American past. We then estimate the returns to education of high school teachers in the early twentieth century using a new data source. a report from the U.S. Commissioner of Education in 1909. Overall, we find significant regional variation in the returns to education that match differences in resource endowments, with large (within-occupation) returns for the Midwest and Southwest (7%), but much lower returns in the South (3%) and West (0.5%). We also show that our results are generalizable to returns to education in the United States and that returns to education for teachers tracked quite closely with the overall returns to education from 1940 onward.
    Journal of Human Capital 12/2007;
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    ABSTRACT: This paper develops a structural model of credit constrained household consump-tion, indivisible investment, and savings behavior, and tests the model using a major government microfinance program as an exogenous quasi-experimental injection of credit. After estimation of parameters using pre-program data, the estimated model is evaluated using the Thai Million Baht Village Fund Program. Simulated predic-tions from the model mirror actual data in reproducing a greater increase in consump-tion than credit, which is interpreted as evidence of credit contraints. A cost-benefit analysis using the model indicates that the program costs just 66 percent of a transfer program providing an equivalent benefit.
    05/2007;
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    Joseph Kaboski
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    ABSTRACT: This paper develops and calibrates a model with endogenous school-ing and returns to schooling to explain Mincerian returns variation across countries, and assess the importance of schooling on output variation. The calibrated model is able to explain forty percent of the variation in the data, substantially more than linear regressions ex-plain. Variation in the direct costs of schooling driven by government funding levels relative to enrollment rates and fertility rates contribute the most to the explanatory power of the model. Nevertheless, high ef-fective discount rates are needed to reconcile the high level of Mincerian returns in the data. In the calibrated model, schooling contributes on average one-third to output per worker.
    04/2007;
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    Francisco J. Buera, Joseph P. Kaboski
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    ABSTRACT: This paper models the relationship between product cycles, specialized capital, specialized skill, and non-homothetic preferences in the shift in production toward services over time. We explicitly model the decision of whether to produce services at home (using manufacturing goods as inputs) or in the market. Market production benefits from increasing returns in the use of specialized capital and skilled labor, but involves a utility cost due to join joint consumption. As the productivity grows, individual services follow a product cycle of moving from market services to home production as the costs of capital fall relative to the utility cost of joint consumption. Skill-intensive services follow this cycle more slowly and non-homothetic preferences increase demand for skill-intensive services over time, which drives a shift toward market services. The model predicts an increase in the share of services, the share of services produced by skilled labor, the level of skill, the return to skill, and the fraction of market services consumed by high income workers
    01/2007;
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    George Alessandria, Joseph Kaboski
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    ABSTRACT: I document that cross-country productivity differences in retail trade, which employs around 20% of workers, are accounted for in large part by compositional differences. In richer countries, most retailing is done in modern stores, with high measured output per worker, whereas in developing countries, retail trade is dominated by less-productive traditional stores. I hypothesize that developing countries rationally adopt few modern stores since car ownership rates are low. A simple quantitative model of home production supports the role of cars in determining the composition of retail technologies used and retail-sector productivity differences across countries.
    Federal Reserve Bank of Philadelphia, Working Papers. 01/2007;
  • Yongseok Shin, Joseph P. Kaboski, Francisco J. Buera
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    ABSTRACT: We study the cross-country relationship between the relative price of tradables and income per capita. The theory developed is based on financial frictions and differences in the efficient scale of production across sectors. Countries with more severe financial frictions are more dependent on self-financing, and so produce at less than efficient scale. Since tradables tend to have larger efficient scales, financial frictions and smaller scale of productions disproportionately lower productivity in tradables. We evaluate the theory using cross-country data on relative prices and financial intermediation, as well as microdata on establishment sizes in the U.S. and Mexico.
    01/2007;