Postgraduate Course: Economics of Labour Markets (ECNM11009)
Course Outline
| School | School of Economics |
College | College of Arts, Humanities and Social Sciences |
| Credit level (Normal year taken) | SCQF Level 11 (Postgraduate) |
Availability | Available to all students |
| SCQF Credits | 10 |
ECTS Credits | 5 |
| Summary | This course will explore various aspects of labour market operations, covering a range of both traditional and contemporary topics in labour economics. The overarching questions we seek to address are: Why does earnings inequality exist? Why do some workers earn more while others earn less? The aim is to provide students with up-to-date knowledge in labour economics and to encourage the development of independent research interests for those considering postgraduate research in this field. This course mostly focuses on non-structural applied micro. |
| Course description |
The course is organised as weekly three-hour lectures. The intended structure is as follows, though adjustments may be made depending on the specific topics covered:
The first 75 minutes will be dedicated to an in-depth exploration of theoretical concepts related to the week's topic.
The following 75 minutes will focus on discussing, critiquing, and evaluating relevant published papers, allowing for a deeper understanding of both the content and the practical implications of the research.
The final 30 minutes will be devoted to hands-on learning, during which we will work with real data sets and apply the concepts covered through problem sets. The core idea is to allow the students to engage with the course material in a different way, focusing on being a producer rather than a consumer of research.
There are two parts to the course. Part A, which is taught by Dr Soledad Giardili, and Part B, which is taught by Dr Maia Güell.
Part A:
Human Capital - Labour is not a homogeneous input to production. Workers can differ in innate skills and acquired skills. Skills can be acquired outside work (by going to school for instance) or on the job (e.g. by learning from your peers). The objective of this lecture will be to understand what the economic reasons are that lie behind the decision of individuals to acquire education and on-the-job training. We also want to explore how these decisions shape workers¿ income over their lifetime. We will analyse empirical studies estimating the return to human capital with a focus on identification issues. We will also study how the empirical literature has disentangled the productivity effect from the signalling effect of human capital.
Firms, Minimum Wages, and Unions - In this lecture, we examine the demand for labour by firms and explore how it is influenced by institutional factors such as minimum wages and unions. We will explore how minimum wages can affect employment and wage distribution, particularly in markets where competition is not perfect. Similarly, we explore the role of unions on employment rates and income inequality.
Compensating Wage Differentials - This lecture will provide an understanding of how differences in tastes and in job characteristics can affect the distribution of wages and explain how compensating wage differentials are determined and how to interpret an hedonic wage function. We will also look at key empirical issues in estimating compensating wage differentials and examples when the theory does not hold.
Discrimination - We will explore whether group identity matters and how it translate into differences in labour market outcomes. We will explore the two classic types of discrimination: taste-based, closely connected to compensating differentials, and statistical, closely connected to learning. We will discuss empirical work on Becker outcome tests and why audit studies are unsatisfying.
Part B:
Unemployment - Labour markets feature unemployment. We will study unemployment to understand how labour markets work. We will place special emphasis to both the level of unemployment as well as unemployment duration. Heterogeneity in unemployment rates and the incidence of long-term unemployment across countries as well as worker¿s characteristics will be discussed. Empirical models that estimate the determinants of unemployment duration will also be covered.
Migration - One aspect of globalisation is increased migration flows from one country to another in order to work. We will study the effects of migration on the local economy in terms of labour market outcomes, including unemployment. We will consider the case of workers being substitutes and complements, as well as short run and long run effects.
Insurance Policies - Having studied the worker¿s risk of unemployment, we will close this part by studying the main public policies that try to insure workers. We will mainly focus on unemployment insurance and firing costs and the effects that the policies themselves have on labour market outcomes.
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Information for Visiting Students
| Pre-requisites | Students should be enrolled on MSc Economics, MSc Economics (Econometrics), MSc Economics (Finance) or MSc Mathematical Economics and Econometrics.
Any other students must email sgpe@ed.ac.uk in advance to request permission.
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| High Demand Course? |
Yes |
Course Delivery Information
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| Academic year 2024/25, Available to all students (SV1)
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Quota: None |
| Course Start |
Block 4 (Sem 2) |
Timetable |
Timetable |
| Learning and Teaching activities (Further Info) |
Total Hours:
100
(
Lecture Hours 18,
Summative Assessment Hours 2,
Programme Level Learning and Teaching Hours 2,
Directed Learning and Independent Learning Hours
78 )
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| Assessment (Further Info) |
Written Exam
100 %,
Coursework
0 %,
Practical Exam
0 %
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| Additional Information (Assessment) |
The assessment for this course will be based entirely on a final three-hour examination, which will account for 100% of the overall grade. The exam will be held during the April/May diet. |
| Feedback |
Not entered |
| Exam Information |
| Exam Diet |
Paper Name |
Hours & Minutes |
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| Main Exam Diet S2 (April/May) | | 2:00 | |
Learning Outcomes
On completion of this course, the student will be able to:
- Critically assess the economic consequences of policy-relevant topics, such as the role of institutional factors like minimum wages and unions and the economic implications of migration flows on local labour markets.
- Analyse labour market phenomena, including unemployment duration, discrimination, and wage differentials, using theoretical frameworks and empirical evidence.
- Evaluate the effectiveness of public policies, such as unemployment insurance and firing costs, in influencing outcomes like employment and income distribution.
- Enhance practical research skills by engaging with hands-on problem sets and real-world data, fostering the ability to critically evaluate theories and conduct empirical analysis.
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Reading List
The primary textbook providing a comprehensive coverage of the core topics is:
Cahuc, P. and A. Zylberberg (2014), Labor Economics, MIT Press.
In addition to the main textbook, the following books offer valuable complementary readings that will provide broader perspectives and deeper insights into specific topics covered in the course:
Ashenfelter, O. and Card, D. (eds.) (1999), Handbook of Labor Economics, Volumes 3A, 3B and 3C, North Holland.
Ashenfelter, O. and Card, D. (eds.) (2010), Handbook of Labor Economics, Volume 4, North Holland.
Borjas, G. (2012), Labor Economics, 6th Edition, McGraw Hill.
Each lecture will also incorporate key journal articles to illustrate how the theory in labour economics has been brought to the data. These articles will be detailed at the beginning of each lecture¿s slides. |
Additional Information
| Graduate Attributes and Skills |
Not entered |
| Keywords | Not entered |
Contacts
| Course organiser | Ms Soledad Giardili
Tel:
Email: Soledad.Giardili@ed.ac.uk |
Course secretary | |
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