Labor Economics

Objectives

The labor market is an important part of everyone's life. First, we invest in our education to accumulate human capital, i.e. we prepare ourselves to participate in the labor market. Then we spend a substantial fraction of our live on the labor market, where we either supply (or demand) labor. In the lecture (=VO), we explore the ideas economists use to understand how labor markets work. This will aid our understanding of topics such as education and training, employment and unemployment, determination of wages, discrimination and migration. In the seminar (=PS) we discuss applied papers from the current literature. The seminar complements the lecture.

Topics

The focus of these courses is on understanding the fundamental models of labor economics keeping also close contact to current empirical research. In addition, we study the role of public policy in affecting wage and employment. We will cover the theory of static and dynamic labor supply, theories of labor demand, labor market equilibrium, the theory of compensating wage differences, human capital, the wage structure, labor mobility, labor market discrimination, and labor unions.

To get to know the relevant Austrian institutions, we plan to have a couple of guest lecturers. In past semesters, we had high-ranking speakers of the following institutions:

  • Austrian Economic Chambers (WKO)
  • Public Employment Service Austria (AMS)
  • The Chamber of Labor (AK)

Readings

The required textbook for the courses is:

  • George J. Borjas, Labor Economics (McGraw-Hill, 7th edition 2013)

Further suggested reading:

  • Tito Boeri and Jan van Ours, The Economics of Imperfect Labor Markets (Princeton University Press, 2nd edition 2013)
  • Ronald G. Ehrenberg and Robert S. Smith, Modern Labor Economics Theory and Public Policy (Pearson, 12th edition 2105)

Meetings

The scheduled meetings (including topic) can be found in the syllabus: pdf-file

Additional material

  • Labor supply: slides
  • Labor demand: slides
  • Labor market equilibrium: slides
  • Compensating wage differentials: slides
  • Human capital: slides (incomplete!)
  • Wage structure: slides
  • Labor mobility: slides
  • Labor market discrimination: slides
  • Labor unions: slides
  • Correspondence testing studies: link

Grading

Lecture: A final exam (with a maximum of 120 points) will be given in the last meeting.

The grading scale is as follows:

Here can find a sample exam: link

Seminar: Each student has to prepare a classroom presentation and write a short report by the end of the semester. In the prepatory meeting, students are asked to pick a topic from the following link. For each topic there is an article in the online journal IZA World of Labor available. This article will be the core literature. On top of that, each student picks on further article as his/her focus article. This focus article should either be referenced in the core article or suggested in the further readings section. Make sure that you pick an accessible (i.e., not too technical) article.

Inform Ms. Fischer (doris.fischer@uibk.ac.at) about your preferred core (and focus) article and coordinate a date for your presentation with her (see here: link). You can also register for an individual consultation to discuss your presentation beforehand. Please book a 20 minutes slot.

There will be about seven sessions for the student's classroom presentations. The final number of sessions will depend on the overall demand (see below). In each session, three students will present their topic. Each presentation will be 20 minutes in total and comprises two parts:

  • Presentation of the core article (10 minutes)
  • Presentation of the focus article of (10 minutes)

Note, I will enforce a strict time limit. Following each presentation, we will have a short discussion, where the audience (=non-presenting students) will ask questions or provide comments.

To prepare for this discussion the non-presenting students have to read the so-called one-pager of each core article. The instructor will verify the compliance with this reading assignment based on at least one short test. This is a 'pop-up' test, i.e. there will be no extra notice!

At the end of the semester students have to hand-in a short report (between 1,500 and 1,700 words). This is a written-version of your presentation, however, with a stronger emphasis on the focus article.

Students will be graded according to their classroom presentation (40%), their short report (40%), and the reading assignment (20%). Schedule of presentations: link

Attendance

Students have to be present at every seminar meeting.