Sciences Po
Objectives: Understand the basic mechanisms of labor market adjustment to external shocks. Review the main methods to evaluate the impact of policies on employment, unemployment and wages. Make sense of key concepts such as elasticities or fiscal incidence. Assess the effect of global phenomena on unemployment and inequality. Review the impact assistance and insurance schemes on labor supply, as well as the role of employment policies in fighting unemployment.
Outline: This course is an introduction to labor economics and the evaluation of employment policies and labour market regulations. We will focus on the basic mechanisms explaining how wages, employment and unemployment are formed. We will describe and explain some important phenomena such over- and under-education, the persistence of discrimination for women, as well as for ethnic or sexual minorities, the growing polarization of jobs and the debate on inequality, as well as the influence of globalization and migration flows. The class will also review the impact of key public policies based on recent empirical research in this field, such as the influence of taxes and transfers, the debate on the minimum wage, the relationship between unemployment insurance and job search behaviors, the link between employment protection and job creation, the impact of training, placement, hiring subsidies on the chances to exit unemployment.
Some complementary useful reference are:
Cahuc, Carcillo & Zylberberg (2014), Labor Economics, 2nd edition, MIT Press
Carcillo and Valfort (2025), Invisible Barriers: Understanding and Overcoming Discrimination in the Workplace
Borjas (2024), Labor Economics, ninth edition, McGraw Hill
Lectures 1: Labor supply and the effect of assistance schemes
CCZ, chapter 1
Lecture 2: Labor demand and the role of hiring subsidies
CCZ, chapters 2 and 14
Lecture 3: Labor market equilibrium and how it reacts to massive shocks
CCZ, chapter 3
Lecture 4: Discrimination against women, sexual minorities, and the premium for beauty
CCZ, chapter 8
Lecture 5: The debated impact of the minimum wage
CCZ, chapter 12
Lecture 6: The role of the unemployment insurance
CCZ, chapter 13
Lecture 7: Labor market policies and the equilibrium effect of targeted measures
CCZ, chapter 14
Lecture 8: Employment protection legislation
CCZ, chapter 13