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Economics 151A

ECONOMICS OF THE LABOR MARKET


COURSE TIME:

Monday, Wednesday 9:00-10:00am (live), Friday (pre-recorded only)


OFFICE HOURS:

Tuesday 10:00-11:00am, Friday 9:00-10:00am; See Canvas announcement for OH and Zoom link

Office hours subject to change, see Canvas for current schedule

Or by appointment, with at least 24 hours’ notice, if times do not work


EMAIL:

[email protected]

Email Policy: Questions about class material should be discussed either in class or office hours. I’d prefer that you keep content-related email to a minimum because it is difficult to explain this material over email.


COURSE WEBSITE:

http://canvas.ucdavis.edu


TEACHING ASSISTANTS:

Maria Del Socorro Pardo Martinez, [email protected]

Ellen Anderson, [email protected]


COURSE DESCRIPTION

This course will cover the following topics:

1. Labor Supply Theory

2. Labor Demand Theory

3. Determination of Wages and Employment in the Labor Market (Labor Market Equilibrium)

4. Economic Theories of Labor Unions

5. Compensating Wage Differentials

Students will receive an understanding of the traditional economic models relevant to the study of the labor market.


STEPS TO SUCCESS

The best way to succeed in this class is to:

1. Read the chapters in the text before lecture

2. Come to class and take notes

3. Review notes/text after the lecture

4. Go to office hours and discussion section and ask questions

5. Practice, practice, practice! Do the homework and exercises from the book


COURSE PREREQUISITES

The prerequisite for this course is Intermediate Microeconomics (Economics 100 or 104). In presentation and testing of the course material, I will also assume that you have background in calculus (Mathematics 16A-16B or 21A-21B) and in statistics (Statistics 13 or 32), which are required courses for the economics major. You should have passed all of these courses with a grade of C- or higher.


READINGS

Required text: George Borjas, Labor Economics (3rd, 4th, 5th, 6th, or 7th edition), Irwin McGraw-Hill. Older versions of the textbook are nearly identical and significantly cheaper.

Current Events: I expect you to read or listen to the news during the quarter.

Further Reading: Additional (optional) suggested readings can be found on the schedule.


GRADING

Distribution of Points:

Your final grade in the course will be determined by the following:

25%                Midterm 1                                    Wednesday, April 21

25%                Midterm 2                                    Wednesday, May 12

35%                Final Exam                                   Friday, June 4 from 10:30am-12:30pm

15%                Current Events Summaries (2)       Due April 16 and May 21

I reserve the right to give extra points for class participation or other deserving contributions and to give negative points for class non-participation or disruptive behavior.

Exam and Re-grade Policy:

There will be no make-up exams. If you miss a midterm exam due to an excused absence, your final exam ranking will determine the score used for your missed midterm. Absences must be excused in advance of the missed exam, or in the case of an emergency, by the end of the day of the exam.

If an administrative error has been made in calculating your grade (such as an arithmetic error in adding up your score) no re-grade request needs be submitted. Merely bring the error to my attention so that I can correct it. If you desire an exam re-grade, please adhere to the following procedure:

? Submit, in person, a typed written request for the re-grade within one week from the day the exams were first returned.

? In your written request, enumerate questions deserving special attention in my second reading of your exam and why such questions deserve special attention.

? Attach the original version of your exam to this written statement.

Please note that your entire exam will be reviewed. That is, if some of your answers are revealed lacking (in content, in clarity, etc.) upon my second reading, you may end up losing points.


CODE OF CONDUCT

I expect students to adhere strictly to the code of academic conduct found at http://sja.ucdavis.edu/files/cac.pdf. In order to protect the integrity of a UC Davis degree and reward the sincere efforts of my students, academic dishonesty of any kind will not be tolerated. I will refer all violations of the Academic Code to Student Judicial Affairs for discipline and impose the strictest sanctions (including failing the course). Academic dishonesty includes using cell phones or notes on exams, copying or looking at another student exam during the exam period, talking during exams or turning in work that was not originally generated by you and only you. Remember that allowing someone to copy your work is cheating, as is copying or attempting to copy from another student. Posting/sharing/selling course materials and purchasing/copying assignments or solutions is also in violation of the code of conduct.


NOTE REGARDING CLASS ATTENDANCE

Attendance during “live” Monday/Wednesday lectures is optional but strongly encouraged. Please take advantage of the opportunity to ask questions during lecture! All lectures will also be available asynchronously in the Canvas Media Gallery, but will be pre-recorded so will not contain questions asked during class. I can teach more effectively if the majority of students have their cameras on, so please keep them on in class and office hours if possible. You are welcome to turn it off if needed.


HOMEWORK ASSIGNMENTS

Homework will be assigned for each of the five topics. Answers will be given in discussion section but will not be posted online. These assignments will not be graded.


CURRENT EVENTS SUMMARIES

You will find a current news article about a policy or issue that relates to the labor market theory we have talked about in class, and turn in a short (approximately ?-? page) write-up of how the issue relates to labor economics and what the theory we’ve talked about in class suggests will happen as a result. More details will be available on the course website.


ADDITIONAL NOTE

If you have a disability or other special needs that are relevant to your success in this class please see me early in the quarter. I will help you get access to resources that may help you deal with any special problems you might have in the course. If you need to request alternate exam accommodations, please submit a request to the SDC and email me before the end of the second week of class. Also please email me at least 2 weeks before each exam to arrange exam logistics.


PRELIMINARY COURSE OUTLINE

Exam dates are fixed, the remainder of the schedule is approximate.

  Introduction
  (3/29)
  Readings: Borjas, Chapter 1 & Appendix
  Topic 1:
  Labor Supply
  Theory
  (3/31-4/16)
  Readings: Borjas, Chapter 2 in the fifth or later editions (or chapters 2 & 3 in earlier editions of
  the text)
  Further Reading:
Examining the Effect of the Earned Income Tax Credit on the Labor Market
Participation of Families on Welfare
V. Joseph Hotz; John Scholz
NBER Working Paper #11968
http://www.nber.org/papers/w11968.pdf
The Estimation of Income and Substitution Effects in a Model of Family Labor
Supply
Orley Ashenfelter; James Heckman
Econometrica, Vol. 42, No. 1. (Jan., 1974), pp. 73-86.
Stable URL: http://www.jstor.org/stable/1913686
Determining Participation in Income-Tested Social Programs
Orley Ashenfelter
Journal of the American Statistical Association, Vol. 78, No. 383. (Sep., 1983), pp.
517-525.
Stable URL: http://www.jstor.org/stable/2288113
Child Endowments and the Quantity and Quality of Children
Gary S. Becker; Nigel Tomes
The Journal of Political Economy, Vol. 84, No. 4, Part 2. (Aug., 1976), pp. S143-
S162.
Stable URL: http://www.jstor.org/stable/1831106
MIDTERM 1 (COVERS TOPIC 1) HELD IN CLASS ON WEDNESDAY, APRIL 21
  Topic 2:
  Labor
  Demand
  Theory
  (4/19-4/26)
  Readings: Borjas, Chapter 3 (or chapter 4 in past editions of the text)
  Further Reading:
The Minimum Wage and the Great Recession: Evidence of Effects on the
Employment and Income Trajectories of Low-Skilled Workers
Jeffrey Clemens; Michael Wither
NBER Working Paper #20724
http://www.nber.org/papers/w20724
Minimum Wages and Employment: A Case Study of the Fast-Food Industry in
New Jersey and Pennsylvania
David Card; Alan B. Krueger
The American Economic Review, Vol. 84, No. 4. (Sep., 1994), pp. 772-793.
Stable URL: http://www.jstor.org/stable/2118030
The Intergenerational Effects of Worker Displacement
Philip Oreopolous; Marianne Page; Ann Huff Stevens
Journal of Labor Economics, Vol. 26, No. 3 (July 2008), pp. 455-483
Stable URL: http://www.jstor.org/stable/10.1086/588493
  Topic 3:
  Labor Market
  Equilibrium
  (4/28-5/10)
  Readings: Borjas, Chapter 4 (or chapter 5 in past editions of the text)
  Further Reading:
The Labor Market Effects of Reducing Undocumented Immigrants
Andri Chassamboulli;Giovanni Peri (2014)
http://www.nber.org/papers/w19932
STEM workers, H1B Visas and Productivity in US cities
Giovanni Peri; Kevin Shih; Sparber
Journal of Labor Economics 33, no. S1 (Part 2, July 2015): S225-S255.
Stable URL: http://doi.org/10.1086/679061
Does Immigration Grease the Wheels of the Labor Market?
George J. Borjas
Brookings Papers on Economic Activity, Vol. 2001, No. 1. (2001), pp. 69-119.
Stable URL: http://www.jstor.org/stable/1209159
The New Jobs Tax Credit: An Evaluation of the 1977-78 Wage Subsidy Program
Jeffrey M. Perloff; Michael L. Wachter
The American Economic Review, Vol. 69, No. 2, (May, 1979), pp. 173-179.
Stable URL: http://www.jstor.org/stable/1801638
Some Simple Economics of Mandated Benefits
Lawrence H. Summers
The American Economic Review, Vol. 79, No. 2, (May, 1989), pp. 177-183.
Stable URL: https://www.jstor.org/stable/1827753
MIDTERM 2 (COVERS TOPICS 2 & 3) HELD IN CLASS ON WEDNESDAY, MAY 12
  Topic 4:
  Economic
  Theories of
  Labor Unions
  (5/14-5/19)
  Readings: Borjas, Chapter 10 (or chapter 11 in past editions of the book)
  Further Reading:
American Trade Union Growth: 1900-1960
Orley Ashenfelter; John H. Pencavel
The Quarterly Journal of Economics, Vol. 83, No. 3. (Aug., 1969), pp. 434-448.
Stable URL: http://www.jstor.org/stable/1880530
The Decline of Unionization in the United States: What can be Learned from
Recent Experience?
Henry S. Farber
Journal of Labor Economics, Vol. 8, No. 1, Part 2 (Jan., 1990), pp. S75-S105.
Stable URL: http://www.jstor.org/stable/2535208
The Effects of Unions on Resource Allocation
Albert Rees
Journal of Law and Economics, Vol. 6. (Oct., 1963), pp. 69-78.
Stable URL: http://www.jstor.org/stable/724852
Learning by Striking: Estimates of the Teetotaler Effect
John F. Schnell; Cynthia L. Gramm
Journal of Labor Economics, Vol. 5, No. 2. (Apr., 1987), pp. 221-241.
Stable URL: http://www.jstor.org/stable/2535067
  Topic 5:
  Compensating
  Wage
  Differentials
  (5/21-6/2)
  Readings: Borjas, Chapter 5 (or chapter 6 in past editions of the book)
  Further Reading:
Compensating Differentials for Cyclical and Noncyclical Unemployment: The
Interaction between Investors' and Employees' Risk Aversion
Elizabeth H. Li
Journal of Labor Economics, Vol. 4, No. 2. (Apr., 1986), pp. 277-300.
Stable URL: http://www.jstor.org/stable/2534823
FINAL EXAM (Comprehensive): FRIDAY, JUNE 4 from 10:30am-12:30am

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