Karol Mazur

Hi there!

I am an assistant professor of economics at Peking University HSBC Business School.

My research interests lie in macroeconomics, development and human capital.

You can see my CV here.

You can contact me via email:

kmazur at phbs.pku.edu.cn

Working Papers

The Macroeconomic Impact of Agricultural Input Subsidies (joint with Laszlo Tetenyi) [Slides]
Abstract: Governments operate agricultural input subsidy programs worldwide. Using a general equilibrium heterogeneous agent model featuring transaction costs, we quantitatively evaluate the macroeconomic consequences of such policies. Focusing on Malawi's Farm Input Subsidy Program, we show that this powerful program increases welfare by redistributing resources towards the poorest and providing food insurance stimulating the occupational mobility of misallocated labor force. Our findings are validated empirically through an event study that leverages the staggered introduction of input subsidy programs across Sub-Saharan Africa.

United on Divisive Waters: Decentralization of Irrigation and Conflict in India (joint with Krzysztof Krakowski)
Abstract: Arguments for decentralizing local public goods often emphasize productivity gains, but such reforms can also shape social cohesion, particularly in diverse communities and for high-stake resources. Exploiting the staggered roll-out of irrigation decentralization across Indian states, we show that these reforms reduce rural riots and perceived village-level conflicts. Our mechanism analysis points at reform-induced increases in the opportunity cost of conflict and highlights increased labor supply in agriculture and strengthened cooperation, which expand irrigation access and ultimately boost agricultural productivity.

The Mystery of Land Rights: Explorations on Informal Institutions in Ghana (joint with Georgios Manalis) - in perparation for the Carnegie-Rochester-NYU Conference Series on Public Policy (preliminary, comments welcome)
Abstract: We investigate why informal institutions persist despite policy efforts to introduce formal alternatives. Using Ghana's nationwide rollout of land registration offices, we show that increased access to formal land institutions does not significantly raise land rights adoption. Instead, we show that local traditional authorities—village chiefs—actively constrain the formalization of agricultural land markets. We develop a structural model of endogenous take-up of land rights, integrating their effects on land markets and informal risk-sharing. While the estimated welfare cost of chiefs' power inhibiting the take-up of land rights is large, the model also reveals a critical trade-off: although enhanced formal land rights typically improve insurance and reduce misallocation, excessive formalization risks collapsing informal insurance networks. Thus, rural communities may rationally retain informal institutions to preserve their immediate benefits.

Publications

Sharing Risk to Avoid Tragedy: Informal Insurance and Irrigation in Village Economies - Journal of Development Economics, 2023.
Abstract: Irrigation provides insurance against aggregate weather shocks, which can interact with other institutions functioning in village communities. I study this relationship in a model of joint co-operation over irrigation and risk sharing under limited commitment. The model dynamics show that if access to irrigation can be regulated by villagers, the two institutions reinforce each other. However, non-excludable irrigation crowds out risk sharing (as is the case with government-managed irrigation). I estimate the framework on data from three villages in India and use it to quantify the relationship between informal insurance and irrigation, and the welfare impact of irrigation public policy.

College Education and Income Contingent Loans in Equilibrium (joint with Kazushige Matsuda) [Online Appendix] - Journal of Monetary Economics, 2022.
Abstract: In 2009 the US government introduced a major income-contingent loans (ICLs) program for financing higher education. We investigate its welfare implications in the presence of income shocks, and endogenous dropout risk and college enrollment. While ICLs provide valuable income insurance and thereby increase college enrollment, they may also lead to adverse selection of individuals with lower ability and generate a moral hazard cost of lowering educational effort and labor hours. We evaluate this insurance-incentives trade-off in a calibrated heterogeneous agent model. We show that ICLs increase welfare and that the social costs of adverse selection and moral hazard are mild.

Risky Human Capital Accumulation with Endogenous Skill Premium - Economic Theory Bulletin, 2022.
Abstract: I investigate the welfare properties of a model with risky human capital accumulation, imperfect substitution between skill types and endogenous skill premium. I show that whenever the insurance markets are incomplete, pecuniary externalities render the competitive equilibrium constrained inefficient with a sub-optimal level of human capital.

A Note on Pessimism in Education and its Economic Consequences - Journal of Economic Inequality, 2021.
Abstract: Investigating interaction of the lumpy nature of educational investments and informational frictions on returns to and costs of education, I show that pessimistic beliefs can be self-confirmed in equilibrium. Among some of its consequences, I argue that the commonly pursued research methods may not always identify the true underlying skill distributions.

Can Welfare Abuse Be Welfare Improving? - Journal of Public Economics, 2016.
Abstract: I analyze quantitatively a model of labor search with unemployment insurance (UI), savings, voluntary quits and various labor attachment requirements. In particular, I study welfare consequences of a powerful reform giving UI entitlement to workers quitting their jobs voluntarily in order to search for another one. Results of the model calibrated to the US labor market show that there are significant welfare gains associated with pursuing a generous entitlement policy for quitters as compared to the US status-quo. Moreover, I employ the assumption of monetary search costs and show that it can explain the empirically documented unemployed worker search behavior. Finally, by inducing different unemployment benefit eligibility requirements, the model identifies a concrete policy that could help us understand differences in the unemployment rate, match quality and income inequality between the US and Europe.