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Welcome to Professor Galizzi's Course, Labor Economics
This course focuses on the branch of economics that deals with the functioning of labor markets. While most economic markets are quite impersonal, labor markets are characterized by ongoing personal relationships between employees and employers, and such relationships are largely shaped by government regulations. Therefore, our study will look not only at the theories regarding employment relationships, and at the existing evidence, but we will also concentrate on a variety of policy issues that directly affect working conditions and pay (such as minimum wage requirements, affirmative action, payroll taxes, workplace safety, subsidized day care). We will also discuss issues that are quite relevant to the current national debate such as migration and diversity in the workplace.
1. Overview of the labor market and income distribution
2. The demand for labor and its elasticity (the role of payroll taxes, minimum wages, overtime, employee benefits)
3. The individual supply of labor and the decision to work within the household (with possible in class experiment about unemployment benefits)
4. Wages, occupational safety and health issues
4. The role of education and training
5. Migration and turnover (with guest speaker)
7. Discrimination in the labor market: gender, race and ethnicity
8. Wages and productivity (the role of tenure, firm size, career concerns)
9. StartSmart exercise on wage negotiation
10. The role of unions
11. Income distribution
During this course, we will first review some basic economic principles and discuss the reasons behind the development of labor economics as a very important self-standing field of economic analysis. We will then move do discuss specific topics to achieve the following main objectives:
• To teach students how to identify the incentives that affect employers’ and employees’ behaviors and how to describe individuals' responses to such incentives through simple analytical models and graphical analysis.
• To teach students how to frame the study of specific labor market policies and how to analyze the likely effects of such policies using basic tools of economic analysis.
• To develop awareness about the different labor market experiences faced by workers who differ in terms of age, gender, race, ethnicity, nationality, and disability status. To teach students descriptive aggregated and desegregated data analysis, and some of the quantitative methods that can be used to study the causes of such differences and some of their potential explanations.
• To teach students how to assess the changes in income distribution that have characterized the U.S. and other western countries during the last fifty years.
• To teach students some of the main differences between the U.S. system and the labor markets of other western economies and developing countries.
• To empower students with knowledge about the functioning of the labor market that will assist them during their job searches.