LABOR ECONOMICS II

4th Module, 2002/2003

Professor: Irina Denisova

TA: Olga Lazareva, OLazareva@cefir.ru

The course will cover main topics in labor economics, and is aimed to add to Labor Economics 1. Participation in Labor 1 is desirable but not obligatory: those experienced in Labor 1 could be expected to have some comparative advantage.

Requirements: There is no texbook for the course, and the compulsory reading list consists of a number of surveys from Handbook of Labor Economics, and a set of papers providing important examples of relevant analysis. The estimated reading load is one survey plus 2 papers per week. There will be 3-4 problem sets, distributed in the end of week and to be handed in to the teaching assistant – Olga Lazareva - in sections a weak later. There will be a final exam given at the end of the module. Problem sets will comprise 30% of the final grade and the exam will account for 70%.

Office hours: My office hours are on Tuesdays and Thursdays, 17.30-18.30, and by appointment. My e-mail address is   IDenisova@cefir.ru

Syllabus and Reading

1. Introduction:  the Nature of Labor Market Analyses; Labor Market Flows; Labor Market Developments in Selected Industrial Nations.  [1 lecture]

·         Pencavel, John (1986), “Labor Supply of Men: A Survey” /in  Ashenfelter, O. and Layard P.R.G. (eds.) Handbook of Labor Economics, Vol.1  (Amsterdam: North Holland).

·         Hamermesh, Daniel S. and Albert Rees (1984) “The Economics of Work and Pay”: Chapter 1.

2. Review of Static Labor Supply Models and Approaches to Their Estimation. [1 lecture]

·         Killingsworth, Mark R. (1983), “Labor Supply”: Chapters 1- 4 (Cambridge University Press).

·         Hamermesh, Daniel S. and Albert Rees (1984) “The Economics of Work and Pay”: Chapter 2.

·         Pencavel, John (1986), “Labor Supply of Men: A Survey” /in  Ashenfelter, O. and Layard P.R.G. (eds.) Handbook of Labor Economics, Vol.1 (Amsterdam: North Holland).

·         Killingsworth, Mark R., and James J. Heckman (1986), “Female Labor Supply: A Survey” /in  Ashenfelter, O. and Layard P.R.G. (eds.) Handbook of Labor Economics, Vol.1(Amsterdam: North Holland).

·         Mincer, Jacob (1962) “Labor Force Participation of Married Women,” in NBER, Aspects of Labor Economics.

·         Becker, Gary (1965) “A Theory of Allocation of Time”, Economic Journal, September, pp.493-517

·         Gronau, Reuben (1977) “Leisure, Home Production, and Work - the Theory of the Allocation of Time Revisited,” Journal of Political Economy, Vol.85, No.6, pp.1099-1123

·         Heckman, James (1974) “Shadow Prices, Market Wages, and Labor Supply”, Econometrica, Vol.42, No.4, pp.679-94

3. Human Capital and Long-Run Labor Supply. Occupational and Educational Choice. Wages and Earnings. Returns to Experience [3 lectures]

·         Killingsworth, Mark R. (1983), “Labor Supply”: Chapter 5 (Cambridge University Press).

·         Hamermesh, Daniel S. and Albert Rees (1984) “The Economics of Work and Pay”: Chapter 3, Chapters 12, 14.

·         Pencavel, John (1986), “Labor Supply of Men: A Survey” /in  Ashenfelter, O. and Layard P.R.G. (eds.) Handbook of Labor Economics, Vol.1, pp.45-50 (Amsterdam: North Holland)

·         Freeman, Richard (1986), “Demand for Education” /in  Ashenfelter, O. and Layard P.R.G. (eds.) Handbook of Labor Economics, Vol.1  (Amsterdam: North Holland).

·         MaCurdy, Thomas (1981) “An Empirical Model of Labor Supply in a Life-Cycle Setting,” Journal of Political Economy, Vol.89, No.6, pp.1059-1085

·         Ben-Porath, Yoram. (1967) “The Production of Human Capital and the Life Cycle Earnings,” Journal of Political Economy,  pp.352-65

·         Mincer, Jacob, and Solomon Polachek (1974) “Family Investment in Human Capital: Earnings of Women”, Journal of Political Economy, Vol.82, No.2, Part 2, pp.S76-S108

·         Mincer, Jacob and Haim Ofek (1979) “The Distribution of Lifetime Labor Force Participation of Married Women: Comment”, Journal of Political Economy, Vol.87, No.1, pp.197-201

·         Willis, Robert J. (1986), “Wage Determinants: A Survey and Reinterpretation of Human Capital Earnings Function” /in  Ashenfelter, O. and Layard P.R.G. (eds.) Handbook of Labor Economics, Vol.1, pp.45-50 (Amsterdam: North Holland)

·         Weiss, Yoram (1986), “The Determination of Life Cycle Earnings: A Survey” /in  Ashenfelter, O. and Layard P.R.G. (eds.) Handbook of Labor Economics, Vol.1  (Amsterdam: North Holland).

·         Rosen, Sherwin (1986), “The Theory of Equalizing Differences” /in  Ashenfelter, O. and Layard P.R.G. (eds.) Handbook of Labor Economics, Vol.1  (Amsterdam: North Holland).

·         Topel, Robert (1991) “Specific Capital, Mobility and Wages: Wages Rise with Seniority,” Journal of Political Economy, Vol.99, No.1, pp.145-76

4. Labor Demand: the Basic Theory; Some Extentions; Empirical Evidence [3 lectures]

·         Hamermesh, Daniel S. and Albert Rees (1984) “The Economics of Work and Pay”: Chapters 4-5.

·         Hamermesh, Daniel S. (1993), “Labor Demand”: Chapters 2, 3 (Princeton University Press)

·         Nickell, Stephen, and James Symons (1990) “The Real Wage-Employment Relationship in the United States,” Journal of Labor Economics, Vol.8, No.1, pp.1-15

·         Rosen, Sherwin (1968) “Short-Run Employment Variation on Class-I Railroads in the US, 1947-1963,” Econometrica, Vol.36, No.3-4, pp.511-29

·         Grant, James H., and Daniel S. Hamermesh (1981) “Labor Market Competition Among Youths, White Women and Others,” Review of Economics and Statistics, Vol.63, pp.354-60

5. Introduction to Equilibrium, Disequilibrium and Adjustment. [1 lecture]

·         Hamermesh, Daniel S. and Albert Rees (1984) “The Economics of Work and Pay”: Chapter 6.

·         Hamermesh, Daniel S. (1993), “Labor Demand”: Chapter 6 (Princeton University Press).

·         Burgess, Simon M. (1988) “Employment Adjustment in UK Manufacturing,” Economic Journal, Vol.98, pp.81-103

6. Unemployment. Incidence of Unemployment. Duration of Unemployment. [3 lectures]

·         Hamermesh, Daniel S. and Albert Rees (1984) “The Economics of Work and Pay”: Chapter 8.

·         Keifer, N.M. (1988) “Economic Duration Data and Hazard Functions,” Journal of Economic Literature,  Vol. 26, June, pp. 646-79

·         Berg, G. L., and G. V. Ours (1993) “Unemployment Dynamics and Duration Dependence,” Economic Journal, Vol.104, pp.432-43

·         Topel, R. (1993) “What Have We Learned from Empirical Studies of Unemployment and Turnover?” American Economic Association. Papers and Proceedings, Vol.83, No.2, pp.110-115

·         Card, David, and Daniel Sullivan (1988) “Measuring the Effect of Subsidized Training Programs on Movements In and Out of Employment,” Econometrica,  Vol. 56, No.3, pp. 497-530

·         Siebert, Horst (1997) “Labor Market Rigidities: At the Root of Unemployment in Europe,” Journal of Economic Perspectives,  Vol. 11, Number 3, pp. 37-54

·         Nickell, Stephen (1997) “Unemployment and Labor Market Rigidities: Europe versus North America,” Journal of Economic Perspectives,  Vol. 11, Number 3, pp. 55-74

7. Labor Markets in Transitional Economies [2 lectures]

·         Svejnar, Jan (1999) “Labor Markets in the Transitional Central and Eastern European Economies” /in  Ashenfelter, O. and D.Card (eds.) Handbook of Labor Economics, Vol.3B  (Amsterdam: North Holland).

·         Boeri, Tito, Michael C. Burda, and Janos Kollo (1998) “Mediating the Transition: Labor Markets in Central and Eastern Europe,” CEPR Economic Policy Initiative No.4 (London: CEPR)

·         Chase,-Robert-S.(1998) “Markets for Communist Human Capital: Returns to Education and Experience in the Czech Republic and Slovakia”, Industrial-and-Labor-Relations-Review; 51(3), pages 401-23.

·         Estrin S. and Svejnar J. (1998) “Employment and Wage Behavior of Industrial Enterprises in Transition Economies: The cases of Poland and Czechoslovakia”, Economics of Transition

·         Kertesi G. and Kollo J. (1999) “Economic Transformation and Return to Human Capital: The Case of Hungary. 1986-96”, Budapest Working Papers on the Labour Market, Institute of Economics.

·         Rutkowski,-Jan (1996) “High Skills Pay Off:  The Changing Wage Structure during Economic Transition in Poland”, Economics-of-Transition; 4(1), pages 89-111.