Schedule of Topics (with links to readings)
Economics 150
Fall 2001

Notes: Readings are in pdf format


I. Introduction (September 18)

1. Some definitions, facts, and figures
2. Overview of supply and demand analysis of the labor market

Reading: Sundstrom, Notes on Labor Economics, chapters 1-2


II. Labor supply (September 20, 25, 27; October 2)

1. Time allocation model: budget constraints and indifference curves
2. Hours of work: effect of wage changes
3. The participation decision: role of income and wages
4. Labor supply of married women
5. Work incentive effects of transfer programs
6. Life cycle labor supply and occupational decisions
7. Individual vs. household decision models
8. Population: births, deaths, and migration

Reading: Sundstrom, Notes on Labor Economics, chapters 3-4
Optional: Blank and Ellwood, "The Clinton Legacy for America's Poor"


III. Regression models in labor economics (October 4, 9, 11)

1. Regression basics: fitting a line
2. Multiple regression
3. Useful regression statistics and diagnostics
4. What can go wrong
5. Logs and dummy (0-1) variables
6. Application: estimating an earnings equation

Reading: Sundstrom, Notes on Regression


IV. Labor demand (October 16, 18, 23)

1. Short run: marginal product model and its interpretation
2. Long run: output and substitution effects
3. Labor demand elasticities
4. Effects of the minimum wage (theory and evidence)

Readings:
Sundstrom, Notes on Labor Economics, chapter 5
Card and Krueger, Myth and Measurement, chapter 2


Midterm: October 25


V. Labor-market equilibrium and applications (October 30, November 1, 6)

1. Competitive labor-market equilibrium
2. Payroll taxes and subsidies
3. Monopsony and its implications
4. Monopoly and its implications
5. Globalization and U.S. labor markets

Readings:
Rodrik, Has Globalization Gone Too Far? chapter 2
Additional TBA


VI. The determination of earnings (November 8, 13, 15)

1. Market model of earnings: supply and demand, productivity, and compensating differentials
2. Human capital model: formal schooling and on-the-job training
3. Signaling model
4. Evidence on the return to schooling
5. Unions, internal labor markets, and other institutions
6. Application: Differences in earnings between college-educated men and women

Readings:
Smith, The Wealth of Nations, chapter 10 (selections)
Sundstrom, Notes on Labor Economics, chapter 6
Weiss, "Human Capital vs. Signalling Explanations of Wages"
Weinberger, "Mathematical College Majors and the Gender Gap in Wages"


VII. Inequality in U.S. labor markets (November 27, 29)

1. Recent trends in earnings and earnings inequality
2. Inequality by race, ethnicity, and gender
3. Discrimination in the labor market: theory and measurement
4. Policy options

Readings: TBA