The subject matter of labour economics is very broad and covers many of the economic topics that are of concern in modern economies. This unit applies the principles and techniques of economics that students have learned over the previous two years to the economics of the labour market. An applied course like labour economics allows these principles to be put into practice in the context of live policy debates. In the first part of the course we study labour demand, including dynamic models and the role of employment protection legislation; then we turn to labour supply, modelling individuals' and households' decisions on paid work, home work and leisure. The second part explores the reasons for wage dispersion and the measurement of wage inequality; then analyses the decision to acquire human capital and introduces evaluation methods of estimation of the wage returns to education.
Upon successful completion of this unit, students will be able to apply economic reasoning to problems in labour economics in areas such as:
Summative Assessment
Three-hour closed book examination in May/June (100%).Formative Assessment
Four assignment lectures and one tutorial presentation.
• Modern Labor Economics: Theory and Public Policy by Ronald Ehrenberg and Robert Smith. Pearson, Addison-Wesley.
• Labor Economics, by George Borjas. McGraw-Hill.
