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Regular version of the site
Bachelor 2018/2019

Labour Economics

Area of studies: Economics
When: 3 year, 3, 4 module
Mode of studies: offline
Language: English
ECTS credits: 4
Contact hours: 56

Course Syllabus

Abstract

Labor Economics is a one-semester course designed for bachelor’s students at ICEF. The main objective of the course is to introduce students to the exciting applied field that is labor economics. The leading idea throughout the course is that economics is an empirical science (not a set of theorems) meant to explain actual behavior. In addition, the labor market is the playing field for numerous important economic policies and institutions: payroll taxes, minimum wages, collective bargaining, etc. A major task for labor economists is to explain how markets function under these regulations. The prerequisites of the course are introductory microeconomics and a course in either Statistics or Econometrics. The knowledge of econometrics software is a plus.
Learning Objectives

Learning Objectives

  • The objective of this course is to introduce students to the economic analysis of the labour market. This involves understanding what are the determinants of the observed structure of wages and employment. A suitable framework to organise what students should learn in this paper is that of supply and demand.
Expected Learning Outcomes

Expected Learning Outcomes

  • Explain, on the supply side, the factors that affect the decision of an individua to work
  • Explain, on the supply side, the factors that affect the decision of an individual to choose a particular job or a career path
  • Explain, on the supply side, the factors that affect the decision of an individual to acquire education and on-the-job training to provide effort in a particular job
  • Assess how governments’ policies could affect the decisions of the individual.
  • Explain, on the demand side, the factors that affect the decision of a firm to hire and fire workers
  • Explain, on the demand side, the factors that affect the decision of a firm to offer jobs with different characteristics (amenities and training for example)
  • Explain, on the demand side, the factors that affect the decision of a firm to discriminate among different workers
  • Explain, on the demand side, the factors that affect the decision of a firm to choose particular compensation policies and to offer different career paths
  • Evaluate how government policies and institutions (such as the unions) affect the decisions of the firm
Course Contents

Course Contents

  • Introduction to Labor
    Economics Basic definitions and facts. Labor economics as applied microeconomics. Labor economics and econometric methods. Labor economics and policy.
  • Labor Supply
    Why work? The neoclassical theory of labor supply. Preferences and budget constraint. Extensive and intensive margins. Estimating labor supply elasticity. Policy applications: taxation of earnings.
  • Home production.
    The economics of the family The multiple tradeoffs of modern families. Children and parents’ labor supply. Policy application: maternity capital.
  • Labor Demand
    Labor demand as a derived demand. Labor demand in the short run and the long. Marshall’s Rules. Policy applications: the minimum wage.
  • Human Capital
    Theory Investment in education and training. The signalling debate. Policy application: training programs.
  • Labor Market Equilibrium
    The competitive labor market. Monopsony. Policy application: the impact of immigration
  • Wage Differentials and Wage Structure
    Compensation for risk. Policy application: why did wage inequality increase?
  • Labor Mobility
    Migration as a human capital investment. Job turnover and matching. Policy application: intergenerational mobility
  • Unemployment
    Types of unemployment. Job search. Efficiency wages. The Phillips curve. Policy application: European unemployment
Assessment Elements

Assessment Elements

  • non-blocking final exam
  • non-blocking mid-term test
  • non-blocking home assignments
  • non-blocking participation grade
Interim Assessment

Interim Assessment

  • Interim assessment (4 module)
    0.4 * final exam + 0.25 * home assignments + 0.25 * mid-term test + 0.1 * participation grade
Bibliography

Bibliography

Recommended Core Bibliography

  • Cahuc, P., Zylberberg, A., & Carcillo, S. (2014). Labor Economics (Vol. Second Edition). Cambridge, MA: The MIT Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=826636

Recommended Additional Bibliography

  • Gary S. Becker. (1994). Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition. National Bureau of Economic Research, Inc. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.b.nbr.nberbk.beck94.1
  • Joshua D. Angrist, & Jörn-Steffen Pischke. (2009). Mostly Harmless Econometrics: An Empiricist’s Companion. Princeton University Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.b.pup.pbooks.8769
  • Tito Boeri, & Jan van Ours. (2013). The Economics of Imperfect Labor Markets: Second Edition. Princeton University Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.b.pup.pbooks.10142