11:00-12:15 TR, 104 Van Hise

John Kennan
6434 Social Science
jkennan@ssc.wisc.edu

Office Hours: Mondays, 1:15-2:45 (or by appointment)

Objectives:
The course presents theories of labor markets, and some evidence on whether the theories work. The core material analyzes labor demand decisions made by profit-maximizing firms, labor supply decisions made by rational workers, and the equilibrium patterns of employment and wages resulting from the interaction of these decisions in competitive markets. Topics include: returns to investment in human capital; immigration; the economics of discrimination; effects of unions on employment and wages; effects of legislation affecting labor markets (such as minimum wage laws and mandatory employer-provided health insurance); unemployment, and recent trends in wage inequality.

Prerequisites:
The course is designed for economics majors and others who are already seriously interested in economics. Economics 301 is a prerequisite.

Text:
The basic text is Labor Economics, 4th Edition, by George J. Borjas, (McGraw-Hill, 2008) which is available at the University Bookstore. This text is ridiculously expensive (as are most textbooks). The 3rd edition is much cheaper, and the content is much the same. Another good text is Modern Labor Economics, by Ronald G. Ehrenberg and Robert S. Smith, (Pearson Addison Wesley); the current (9th) edition of this text is also expensive, but you might find a cheap used copy, or an earlier edition. Of course the lectures (and indeed the exams) may contain material that is not covered in the text. Supplementary readings will be assigned as needed.

Exams and Grades:
There will be an in-class midterm exam, a cumulative final, and an optional short term paper. There will also be regular homework assignments, which you should use to prepare for exams. The midterm will be on Thursday, October 18, and the final will be on Thursday, December 20, at 10:05 a.m.

Everyone is encouraged to write a paper. The paper can't hurt your grade, but it won't help unless you average at least a BC on homework and exams. Grades before the paper will be based on the following weights: Homework 20%, Midterm 35%, Final 45%. If this gives you a BC or better, a good paper raises your course grade by a half-point (or a full point if the paper is very good). So a BC on exams without a paper is a BC for the course; BC on exams plus a good paper is a B for the course.

Incompletes:
No incomplete grades will be given except under extraordinary circumstances.

Term Papers:
Papers can be on any topic related to labor economics. Finding a topic is an important part of the exercise: I won't offer suggestions (although I'll be happy to respond to preliminary ideas that you come up with). The paper should be short: 5-10 pages. It should be well written (you are encouraged to use the Writing Center for help with this). It should contain a statement of your own ideas, backed up by suitable analysis or empirical evidence. A survey of what others have said or written won't do. If you plan to write a paper you must submit an outline or draft by November 16. The completed paper is due by December 10, at 5 PM. Meeting the deadline is another important part of the exercise, so there will be NO EXTENSIONS.