This learning unit is not open to incoming exchange students!
Teacher(s)
Language
English
Main themes
It is widely accepted that the labour market does not function as a standard purely competitive market. The course discusses why actual labour markets are far more complex than this convenient reference model. It ad-vances four main channels through which the relationship between wages, employment and unemployment is affected (1) employees bargaining power (due to unionisation, turnover costs or investment); (2) risk aversion; (3) imperfect information; (4) monopsony power; (5) "social norms". The courses therefore cover a wide spec-trum of theories. Within the time available, it is only possible to provide an introduction to these theories.
Learning outcomes
At the end of this learning unit, the student is able to : | |
| 1 | The objective of the course is to develop graduate students' abilities in acquiring a better understanding of the functioning of labour markets on the basis of the recent literature of the profession. This literature is usually formulated in terms of formal mathematical models. The lectures aim at helping the student to use and under-stand the intuition of these formal models as tools for the analysis of the labour market. Moreover, they endeav-our to foster the students' understanding of the methodological issues involved when going from the theoretical analysis to the empirical testing of hypotheses formulated by theory. |
Content
It is widely acknowledged that the labour market does not operate as a typical, purely competitive market. The course LECON2608 delves into the complexities of real-world labour markets, highlighting why they differ significantly from this simplified reference model.
The course examines the key factors influencing the relationship between wages, employment, and unemployment, including:
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*due to time constraints, it is only possible to provide an introduction to some of them.
The course examines the key factors influencing the relationship between wages, employment, and unemployment, including:
- Labour market heterogeneity,
- Search costs,
- Imperfect information,
- "Social norms," such as prejudices and stereotypes, which contribute to wage discrimination.
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*due to time constraints, it is only possible to provide an introduction to some of them.
Teaching methods
The course consists of lectures on the above-listed theories and assignments, some of them implying econometric analysis of microdata.
Evaluation methods
End-of-term evaluation + continuous evaluation
1. The course material of the lectures will be evaluated on the basis of a written final exam.
2. Occasionally, there will be a homework assignment. Typically, you will have to solve (an) exercise(s) or quantify the magnitude of a predicted outcome. You could also have to read a paper.
Grading is based on the following weights:
1. The course material of the lectures will be evaluated on the basis of a written final exam.
2. Occasionally, there will be a homework assignment. Typically, you will have to solve (an) exercise(s) or quantify the magnitude of a predicted outcome. You could also have to read a paper.
Grading is based on the following weights:
- Homework assignments: 3/20
- Final/end-of-term exam: 17/20
Other information
Math: A course in algebra and some familiarity with calculus, especially, with the concept of derivatives.
Economics: Intermediate microeconomics and econometrics
Although it is not a prerequisite, some students have already followed an introduction to labour economics at the undergraduate level or in a professional master's (e.g. at ESL/UNamur courses forming OS10. Labour and Human Resources Economics ). If not, the student should be aware that some basic topics in labour economics are not covered by LECON2608: labour supply, labour demand and human capital theory in particular. Often, they have to some extent been introduced in a course in microeconomics or in macroeconomics. It is assumed that students have at least a basic knowledge about static labour demand and supply, and perfect competition theory. Having heard about compensating wage differentials and human capital theory is an advantage but not a prerequisite.
Participants are all expected to be familiar with the use of a statistical package (Stata, SAS, R…).
Economics: Intermediate microeconomics and econometrics
Although it is not a prerequisite, some students have already followed an introduction to labour economics at the undergraduate level or in a professional master's (e.g. at ESL/UNamur courses forming OS10. Labour and Human Resources Economics ). If not, the student should be aware that some basic topics in labour economics are not covered by LECON2608: labour supply, labour demand and human capital theory in particular. Often, they have to some extent been introduced in a course in microeconomics or in macroeconomics. It is assumed that students have at least a basic knowledge about static labour demand and supply, and perfect competition theory. Having heard about compensating wage differentials and human capital theory is an advantage but not a prerequisite.
Participants are all expected to be familiar with the use of a statistical package (Stata, SAS, R…).
Online resources
Slides, exercises, compulsory readings will be available on the course webpage on Moodle UCL (https://moodle.uclouvain.be/).
Bibliography
Ackerberg, Daniel A., Kevin Caves, and Garth Frazer (2015). “Identification Properties Of Recent Production Function Estimators”. In: Econometrica 83.6, pp. 2411–2451.
Becker, Gary (1971). The Economics of Discrimination. 2nd ed. University of Chicago Press.
Cahuc, P., S. Carcillo and A. Zylberberg (2014): Labour Economics, 2nd edition, MIT Press
Gelbach, Jonah B. (2016). “When Do Covariates Matter? And Which Ones, and How Much?” In: Journal of Labor Economics 34.2, pp. 509–543.
Hellerstein, Judith K., David Neumark, and Kenneth R. Troske (1999). “Wages, Productivity, and Worker Characteristics: Evidence from Plant-Level Production Functions and Wage Equations”. In: Journal of Labor Economics 17.3, pp. 409–446
Becker, Gary (1971). The Economics of Discrimination. 2nd ed. University of Chicago Press.
Cahuc, P., S. Carcillo and A. Zylberberg (2014): Labour Economics, 2nd edition, MIT Press
Gelbach, Jonah B. (2016). “When Do Covariates Matter? And Which Ones, and How Much?” In: Journal of Labor Economics 34.2, pp. 509–543.
Hellerstein, Judith K., David Neumark, and Kenneth R. Troske (1999). “Wages, Productivity, and Worker Characteristics: Evidence from Plant-Level Production Functions and Wage Equations”. In: Journal of Labor Economics 17.3, pp. 409–446
Faculty or entity
