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Labour Economics (Ec 423)
Lent Term
Radha Iyengar
Office: R425
Tel: 7955 3563
Office Hour: Monday 3:30-4:30
This part of the course will build on what you learned in the first term but with a heavier emphasis on the labour demand side. The goal is to build a strong link between the theoretical foundations and the empirical evidence currently available. In addition, the course is structured to allow you to develop research questions and explore what areas remain fruitful for research.
The course is set up with a 2-hour lecture each week on Monday. On Monday afternoon we will discuss a paper. You will be expected to prepare referee reports each week and 1 person each week will be required to present.
Lectures
Statistical
software and Data
The data used in the course, lectures, classes and assignments, will be provided to you in STATA format. STATA is a statistical software program commonly used by economists. You can use the data we provide to follow along the lecture as well as complete your assignments
Each week we will cover a set of topics that have useful empirical applications. While these applications are not contained in any particular text, you may find it useful to have the following texts for your reference or review :
You will also need to read and understand the following papers to participate in class and take the final exam.
1.Wage Structure in Labor Markets
A. General Facts on Wage Structure and
Inequality in OECD Countries
Katz,
Goldin, C. and R. Margo "The Great Compression: The Wage Structure in
the
Levy, F. and R. Murnane "US Earnings Levels and Eranings Inequality: A Review of Recent Trends and Proposed Explanations" Journal of Economic Literature Vol 30, Issue 3, Sep, 1333-1381
Blau, F. and L. Kahn "Insternational Differences in Male Wage Ineqaulity: Institutions versus Market Forces" Journal of Political Economy Aug, 791-837
B. Differences
by Skill/Education
Katz, L and K. Murphy (1992) Changes in Relative Wages, 1963-1987: Supply and Demand Factors" Quarterly Journal of Economics Feb. 35-78
Acemoglu, D. (2002) "Technical Change, Inequality and the Labor Market" Journal of Economic Literature, 40, 27-72
Autor, D, Katz, L, and A. Krueger (1992) "Computing Inequality": Have Computers Changed teh Labor Market" Quarterly Journal of Economics, Nov. 1169-1213
Lee, D. (1999) "Wage Inequality in the
C. Differences
by Race and Gender
Altonji, Joseph G. & Blank, Rebecca M., 1999. "Race and gender in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 48, pages 3143-3259
Neal, D. and W Johnson "The Role of Premarket Factors in Black-White Wage Differences" Journal of Political Economy vol 104, no.5, 869-895
Blau, F. and L. Kahn (2000) "Understanding International Differences in the Gender Pay Gap" Journal of Labor Economics Vo. 21, no. 1
Goldin, C. (1992) "Understanding the Gender Gap: An Eocnomic History of Ameircan
Women" in Burstein (ed.) Labor Market
Discrimination and
2.General Human Capital (Education) and Wages
A. Theory
Card, D. (1999) "Causal Effect of Education on Earnings" in O. Ashenfelter & D. Card (ed.). Handbook of Labor Economics, Elsevier, edition 1, volume 3, number 3, January
Heckman, JJ (1976) "A Life-Cycle Model of Earnings, Learning, and Consumption" Journal of Political Economy Vol 84 issue 4
Willis and Rosen (1979) "Education and Self-Selection" Journal of Political Economy, Vol. 87, No. 56
B. Empirical
Grilliches, Z. "Estimating the Returns to School-Some Econometric Problems," Econometrica, vol. 45 January 1977, 1-22
Angrist and Krueger (1991) "Does Compulsory School Attendance Affect Schooling and Earnings?" The Quarterly Journal of Economics, Vol. 106, No. 4 (Nov., 1991), pp. 979-1014
Ashenfelter, O and C. Rouse (1998) "Income, Schooling and Ability: Evidence from a New Sample of Identical Twins" Quarterly Journal of Economics vol 113, No 1. pp.253-284
3.Signalling and Screening
A. Theory
Spence, M. (1973) "Job Market Signalling" Quartlery Journal of Economics vol 87. 355-374
Stigliz, J (1975) "A Theory of Screening, Education, and the Distribution of Income" American Eocnomic Review
Andrew Weiss (1995). "Human Capital vs. Signalling Explanations of Wages". Journal of Economic Perspectives 9 (4): 133--154
B. Empirical
Lang, K and D. Kropp (1986) "Human Capital versus Sorting: The EFfects of Compulsory Attendance Laws" Quarterly Journal of Economics Vol 101 August, 609-624
Tyler, J., Murnane, R., and J. B. Willett, "Estimating the Labor Market Signaling Value of teh GED" Quarterly Journal of Economics vol 115, May, 431-468
Bedard, K. (2001) "Human Capital versus Signaling Models: University Access and HIgh School Dropouts" Journal of Political Economy vol 109. August 749-775
4.Specific Human Capital
Theory
Mincer (1962) "On-the-job Training: Costs, Returns, and Some Implications" Journal of Political Economy vol 70, p. 50
Jovanovich (1979) "Job Matching and the Theory of Turnover" Journal of Political Economy pp.972-990
Jovanovich (1979) "Firm Specific Capital and Turnover" Journal of Political Economy pp.1246-1260
Farber, Henry S., 1999. "Mobility and stability: The dynamics of job change in labor markets," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 37, pages 2439-2483
Empirical
Altonji, J and R. Shakotko (1987) "Do Wages Rise with Job Seniority" The Review of Economic Studies Vol 54, Issue 3 (July) pp.437-459
Abraham, K. and H Farber (1987). "Job Duration, Seniority, and Earnings." American Economic Review 77, no. 3 (June): 278-297.
Topel, Robert. (1991) "Specific Capital, Mobility, and Wages: Wages Rise with Job Seniority." Journal of Political Economy 99, no. 1 (February ): 145-176.
Acemoglu, Daron, and Jörn-Steffen Pischke. "Why Do Firms Train." Quarterly Journal of Economics 113, no. 1 (February 1998): 78-118.
5.Discrimination
Theory
Becker, G. The economics of Discrimination,
Cain, Glen G. (1986) The Economic Analysis of Labor Market Discrimination: A Survey" O. Ashenfelter & R. Layard (ed.) Handbook of Labor Economics, , chapter 13, pages 693-781, 1987.
Empirical
Goldin, C. and C. Rouse (2000) "Orchestrating Impartiality: The Impact of Blind Auditions on the Sex Composition of Orchestras" American Economic Review (Sept) 715-741
Neumark, D., Band, R. and K. Van Nort (1996) "Sex Discrimination in Restaurant Hiring: An Audit Study" The Quarterly Journal of Economics, Vol. 111, No. 3 (Aug., 1996), pp. 915-941
Goff, B, McCormick, R, and R. Tollison "Racial Intergration as Innovation: Empirical Evidence from Sports Leagues" American Economic Review Vol 92. Iss 1. pp.16-26
Bertrand, M and
Charles, K and J. Guryan (2007) "Prejudice and the Economics of Discrimination". NBER Working Paper No. W13661
6.Illegal Labor Markets
Theory
Gary Becker (1968). "Crime and Punishment: An Economic Approach". The Journal of Political Economy 76: pp. 169--217
Ehrlich, Isaac, 1973. "Participation in Illegitimate
Activities: A Theoretical and Empirical Investigation," Journal of
Political Economy,
Freeman, Richard B., 1999. "The economics of crime," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 52, pages 3529-3571
Empirical:
Levitt, Steven D. 2004. Understanding why crime fell in the 1990s: Four factors that explain the decline and six that do not. Journal of Economic Perspectives, v. 18, n. 1, pp. 163-190.
Gould, E, Mustard, D. and B. Weinberg "Crime
Rates and Local Labor Market Opportunities in the
Donohue, John and Steven Levitt (2001). " The Impact of Legalized Abortion on Crime." Quarterly Journal of Economics, (May):379-420.
Levitt, Steven and Sudhir Venkatesh (2000). " An Economic Analysis of a Drug-Selling Gang's Finances." Quarterly Journal of Economics, August.
7.Crime Policy and Interventions
Theory
Stigler, GJ (1970). "The Optimal Enforcement of Laws". The Journal of Political Economy (0022-3808), 78 (3), p. 56.
Ehrlich, I (1996) "Crime, Punishment and the Market for Offenses" Journal of Economic Perspectives, Vol. 10, No. 1, pp. 43-67, Winter
Polinsky, A. Mitchell, and Steven Shavell, 1984, "The Optimal Use of Fines and Imprisonment," Journal of Public Economics 24: 89-99.
Empirical
Kessler, Daniel and Steven Levitt (1999). " Using Sentence Enhancements to Distinguish Between Deterrence and Incapacitation." Journal of Law and Economics, v. 42 (April):343-63.
Donohue, J. and J. Wolfers "Uses and Abuses of Empirical Evidence in the Death Penalty Debate" Stanford Law Review (2005) 58:791-846.
Iyengar, Radha (2008) I'd Rather Be Hanged for a Sheep than a Lamb: The Unintended Consequences of 'Three-Strikes' Laws". NBER Working Paper No. W13784
Lee, David and Justin McCrary (2005) "Crime, Punishment, and Myopia," NBER Working Paper No. 11491