LABOR ECONOMICS

1^st Module, 2002/2003

Professor: Reuben Gronau

The reading list consists of the articles in list. The reading of the survey papers is optional, and is intended to give an overall view of the topics discussed.

i. Labor Supply

a. The basic model of labor supply.

b. Non-linear price lines (overtime, rationing, taxes and transfer scheme etc.).

c. The allocation of non-market time.

d. Labor supply over the life -cycle.

e. Labor supply over the business cycle.

f. Estimation.

Surveys

• Pencavel, J. "Labor supply of men," Handbook of Labor Economics (O.C. Ashenfelter and R. Layard, eds., 1999), ch.l.
• Killingsworth, M.R. and Heckman, J.J., "Female Labor Supply" in Handbook of Labor Economics, ch. 2,
• Gronau, R., "Home Production — A Survey, HLE, ch. 4.
• Lazear, E., "Retirement From the Labor Force," HLE. ch.5.
• Killingsworth, M.R.,(1983) Labor Supply. Cambridge University Press (pp. 1-206)
• Moffitt R.E., New Developments in Econometric Methods for Labor Market Analysis”, HLE, ch.24.
• Blundell R. And Macurdy T., “ Labor Supply: a Review of Alternative Approaches”, HLE, ch.27.
• Berndt E. R.( 1991), Econometrics, ch.11, Addison-Wesley .

Articles

• Ben Porath, Y., (1973) "Labor Force Participation Rates and the Supply of Labor," JPE. 81(3): 679-704.
• Mincer, L, (1962) "Labor Force Participation of Married Women: A Study of Labor Supply," in Aspects of Labor Economics. National Bureau of Economic Research, Princeton University Press: 63-105.
• Goldin, C., (1989) "Life-Cycle Labor-Force Participation of Married Women: Historical Evidence and Implications," Journal of Labor Economics.
• Becker, G.S. (1965), "A Theory of the Allocation of Time," E.J. 75: 493-517.
• Gronau, R., (1977), "Leisure, Home Production and Work — the Theory of the Allocation of Time Revisited," JPE 85 (6): 1099-1123.
• Juster, F.T., and F. Stafford, (1991) "The Allocation of Time: Empirical Findings, Behavioral Problems, and Problems of Measurement," Journal of Economic Literature, (June).
• M. Abbott and O. Ashenfelter, (1976) "Labor Supply, Commodity Demand, and the Allocation of Time." Review of Economic Studies (October).
• Browning, M. and Meghir, C. (1991) "The Effects of Male and Female Labor Supply on Commodity Demands," Econometrica 59(4):925-51.
• Becker, G.S., (1975) The Allocation of Time and Goods Over the Life Cycle. NBER, Columbia University Press: 83-132.
• Altonji, J., (1986) "Inter-temporal Substitution in Labor Supply: Evidence from Micro Data," JPE 94 (June).
• MaCurdy, Т.Е., (1981), "An Empirical Model of Labor Supply in Life Cycle Setting," JPE 89(6): 1058-1085.
• Browning, M., Deaton A., and Irish M. (1985), "A Profitable Approach to Labor Supply and Commodity Demand over the Life-Cycle," Econometrica 53: 503-543.
• Gronau, R. (1974), "Wage Comparison — Selectivity Bias," JPE 82(6): 1119-1143.
• Heckman, J. (1979) "Sample Selection Bias as a Specification Error," Econometrica 47: 153-162.
• Mroz, T.A., (1987), "The Sensitivity of an Empirical Model of Married Women's Hours of Work to Economic and Statistical Assumptions," Econometrica, (July) pp. 765-799.

ii. The Quality of Labor (The Investment in Human Capital)

a. The investment in schooling.

b. On the job training.

c. Alternative interpretations.

d. Estimation

e. The gender wage difference.

f. Implications: Income distribution, growth.

g. Specific human capital and labor turnover.

Books

• Backer, G.G. (1975). Human Capital. 2nd ed. Chicago University Press.
• Mincer, J. (1974), Schooling Experience and Earnings. Columbia University Press, N.Y. Chs. 1-5.

Surveys

• Willis RJ. "Wage Determinants: A Survey and Reinterpretation of Human Capital Earnings Functions," HLE. ch. 8.
• Weiss, Y. "The Determinants of Life Cycle Earnings: A Survey," HLE. ch. 11.
• Freeman R., "Demand for Education," HLE, ch.6.
• Card D.,” The Causal Effect of Education on Earnings”, HLE, ch.30.
• Katz L.F. and Autor D.H., “Changes in the Wage Structure and Earnings Inequality”, HLE, ch.26.
• Berndt E. R.( 1991), Econometrics, ch.5, Addison-Wesley .

Articles

• Welch, F. (1970), "Education and Production," JPE. 35-59.
• Ben Porath, Y. (1967), "The Production of Human Capital and the Life-Cycle of Earnings," JPE. 75:352-365.
• Blinder A. and Weiss Y. (1976), "Human Capital and Labor Supply: a Synthesis," JPE. 84: 449-472.
• Spence, M. (1973), "Job Market Signaling," QJE. 87: 355-375.
• Murphy, K.M. and F. Welch, "Empirical Age-Earnings Profiles," Journal of Labor Economics 8 (April 1990): pp. 202-229.
• Katz, L.F. and Murphy, K.M., (1992) "Changes in Relative Wages 1963-1987: Supply and Demand Factors," QJE, 107:1 (Feb.).
• Sawhill, I., (1988) "Poverty in the U.S: Why is it so Persistent? JEL, 26.
• Griliches, Z., (1979) "Sibling Models and Data in Economics: Beginnings of a Survey," JPE (supplement), 87: S37-S64.
• Card, D. and A. Krueger, (1992) "Does School Quality Matter? Returns to Education and the Characteristics of Public Schools in the United States," JPE 100 (February): pp. 1-40.
• Rosen, S. (1977), "Human Capital: A Survey of Empirical Research," in R. Ehrenberg, ed., Research in Labor Economics. Greenwich Conn.: JAI Press, Vol. 1.
• Willis, R. and S. Rosen, (1979) "Education and Self -Selection," JPE. 87 (1979): S7-S36.
• Mincer, J. and Polachek, S. (1974), "Family Investment in Human Capital: Earnings of Women," JPE (supplement), 82:S76-S108.
• Mincer, J. and Ofek, H. (1982), "Interrupted Work Careers: Depreciation and Restoration of Human Capital," Journal. Human Resources 17:3-24.
• Gronau, R. (1988) "Sex-Related Wage Differentials and Women's Interrupted Labor Careers — The Chicken or the Egg," JOLE. 6:3.
• Brown, J. (1989), "Why do Wages Increase with Tenure?" AER. 79:971-992.
• Lillard, L. and Willis R.J. (1978), "Dynamic Aspects of Earnings Mobility," Econometrica. 46:985-1012.
• Hashimoto, M. (1981), "Firm Specific Human Capital as Shared Investment," AER. 79:475-482.
• Mincer J. and Jovanovic B.(1981), "Labor Mobility and Wages," in S. Rosen (ed.) Studies in Labor Markets. Chicago: University of Chicago Press.
• Jovanovic, B. (1979), "Job Matching and the Theory of Turnover," JPE. 87:972-990.
• Salop J. and Salop S. (1976), "Self -Selection and Turnover in the Labor Market," QJE 90:619-627.
• Krueger A. and Pischke J.S. (1995)” A Comparative Analysis of East and West German Labor Markets : Before and After Unification”. In Freeman R.B. and Katz L.F.,(eds.) Differences and Changes in Wage Structure, Chicago: Chicago University Press.