This course is no longer offered

10508 Labor Economics 1

Credits: 3 advanced credits in Economics

Prerequisites: 36 credits, including Price Theory I; Price Theory II; Price Theory III; Econometrics; Macroeconomics I; Macroeconomics II. Students must also fulfill all English requirements.

Objectives: An in-depth and comprehensive survey of various aspects of the labor market, such as wage differentials, participation in the labor market, discrimination and linkage arrangements.

Goals: To expose students to a practical area which deals with wages and employment and to the use of economic models to formulate research hypotheses and examine hypotheses on the basis of econometric findings.

Topics: Labor supply – individual labor supply; implementation of the model and analysis of the influence of transfer payments. Participation in and withdrawal from the labor market – the existence of fixed costs in entering the labor market; division of time between leisure and work in and outside of the house; departure of men from the labor market. Investment in education – investment in human capital; investment on-the-job. Compensatory wage differentials – compensation for investment in education; Mincer's wage equation; wage differentials to compensate for risk. Demand for workers – survey of demand functions, Marshall's laws; labor as a semi-permanent production function. Labor contracts – replacement of workers and Feldstein's model; cost-of-living adjustments; risk distribution and the relationship between wages and output; various wage systems to provide incentives to workers. Trade unions – basic facts about trade unions; the trade union as a cartel; the guild model: implementation among accountants, doctors and free professions; the union on the factory level; negotiation.

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1Students may write a seminar paper in this course, although it is not required.