April, 2005                          Economics  750/751: Labor Economics

Outline

      This is a two-semester field sequence presenting a detailed analysis of the main areas in labor economics, and providing a broad foundation for original research in the field. The order of topics is flexible.

I. Supply

             1.   Static Labor-Leisure Choices

             2.   Effects of Social Programs and Income Taxes

             3.   The Life-Cycle Model

             4.   Investments in Human Capital

             5.   Collective Models of Household Labor Supply

             6.   Occupational Choice

II.  Demand

             1.   Static Cost, Profit and Labor Demand Functions

             2.   Elasticity of Derived Demand: the Hicks-Marshall Rules

             3.   Adjustment Costs and Dynamic Labor Demand

III.        Equilibrium

             1.   Compensating Differences -- Adam Smith

             2.   Evidence on Premia for Risky or Nasty Jobs

             3.   Efficiency Wages

             4.   Segmented Labor Markets

             5.   Migration

IV.       Microdata on Wages and Employment

             1.   Current Population Survey

             2.   NLSY, PSID and SIPP

V.  Wage Structure

                   1.   Industry Wage Differentials

                   2.   Secular Movements in Productivity and Real Wages

                   3.   Returns to Education

                   4.   Signalling

                   5.   Pensions and Retirement

                   6.   Evaluation of Training Programs

                   7.   Minimum Wage Laws

                   8.   Earnings of Immigrants

VI.       The Distribution of Income

                   1.   Earnings by Size

                   2.   The Roy Model

                   3.   Functional Distribution

                   4.   Intergenerational Income Mobility

VII.      Cyclical Fluctuations

                   1.   Equilibrium Models of Employment Fluctuations

                   2.   Real Wages over the Business Cycle

VIII.     Discrimination

                   1.   Economic Effects of Prejudice: Theoretical Analysis

                   2.   Wage Differentials by Race and Sex

IX.      Unemployment

                   1.   Definition and Measurement

                   2.   Variations over Time and Space

                   3.   Job Search

                   4.   Gross and Net Flows of Workers and Jobs

                   5.   Effects of Unemployment Insurance

X.         Unions

                   1.   Objectives and Political Structure

                   2.   Bargaining Theories

                   3.   Relative Wage Effects

                   4.   Strikes

                   5.   Union Growth and Decline

                   6.   Unions in the Public Sector

                   7.   Arbitration

XI.       Labor Contracts

                   1.   Employment Determination

                          a.   Allocation of Risk

                          b.   Seniority Rules

                   2.   Compensation

                          a.   Backloading

                          b.   Bonding

                          c.   Tournaments