Spring 2007 Office: Bunce Hall, Room 262 ECON 04: Course 345: Section 01 Phone: (856) Labor Economics

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1 Professor Sanae Tashiro Office: Bunce Hall, Room 262 ECON 04: Course 345: Section 01 Phone: (856) Classes: TR 3:15PM-4:30PM Location: Bunce Hall, Room 321 Office Hours: TR 9:30-10:30AM & W 2-3PM (or by appointment) Labor Economics Course Description: Labor Economics (ECON ) is an undergraduate upper division course that develops a general understanding of labor economics principles and theories. It examines the behavior of employers and employees and also analyzes the role of government in the labor market. This course includes the theoretical models of labor demand, labor supply and labor market equilibrium; theories of wage determination, including wage differentials and discrimination; the labor market within the firm; unions; the role of government and labor market regulations; and poverty and income inequality. Basic calculus, knowledge of statistics, and graphical techniques will be used to analyze these issues. Prerequisite: Intermediate Microeconomics (ECON ) and Economic Statistics (ECON ) or equivalent. Course Objective: The main objective of this course is for students to attain a general understanding of issues that have been raised in labor market operations and to develop a keen interest in analyzing various topics related to labor market outcomes. Students will: (1) understand the theoretical model of the labor market; (2) learn the theory of wage determination, including wage differentials, and evaluate the distribution of income; (3) learn the theory of labor market discrimination and examine the effect of discrimination in the labor market; (4) comprehend the instruments used to analyze the effect of labor unions; and (5) evaluate a variety of important public policies that affect labor market operations. Required Textbook /Supplemental Material /Readings: George J. Borjas, Labor Economics, 3rd Edition, Irwin McGraw-Hill. Labor Economics: Supplemental Material by ST (Available at Rowan Bookstore). Assigned Academic Journal Articles. Recommended Textbooks: Ehrenberg, R. G. and R. S. Smith, Modern Labor Economics, 8th Edition, Addison-Wesley. 1

2 Determination of Final Grade: Three Midterms (The lowest score will be dropped) 40% (Each 20%) Final Exam (Cumulative) 30% 4 Problem Sets 20% (Each 5%) Term Paper 10% The grading scale for the course will be: A+ 98 C A C A C B D B F 54 B Examinations: There will be three midterm exams and a final exam. All exams will consist of multiple choice, problem solving, and/or short essay questions. Assignments: There will be four problem sets. The problem sets will include multiple choice, problem solving, and/or short essay questions. Students are expected to submit the problem sets and the term paper at the scheduled time; exceptions must be negotiated in advance (except in the case of an emergency). Late submissions, if accepted, will bear the opportunity cost of a decreased grade. Online submission (using or WebCT) will NOT be accepted. There is NO option for extra credit of any kind. The following is the schedule for assignments. Problem Set Assigned Due Problem Set #1 1/16 (T) 2/1 (R) Problem Set #2 2/13 (T) 3/1 (R) Problem Set #3 3/20 (T) 4/5 (R) Problem Set #4 4/17 (T) 4/24 (T) Term Paper 3/22 (R) 4/19 (R) 2

3 Course Policies: Attendance: Exam: Drop Class: Every student is expected to attend and to participate in class. If you miss a class, you are responsible for obtaining class notes, assignments, etc. There are NO MAKE-UP EXAMS. So, please do not miss any of the dates when exams are given. If you decide to drop the class, you must submit a program change at WEB for Students or TTR within the time period that drops are allowed. Pass-No Credit: If you decide to choose the Pass-No Credit option for this class, you must request this from your instructor within the first two weeks of the semester, after first obtaining your academic advisor s written permission. Assignments: Cheating: Each student is expected to write and submit his/her own assignments. The submission of work that is not the product of the student s own efforts is dishonest and will be graded as a zero on the assignment. The official policy states as follows: It is essential to that the grades awarded to students reflect only their own individual efforts and achievements. Each segment of the academic community, i.e., faculty, students and administration, is responsible for the academic integrity if the University. Academic dishonesty, in any form, will not be tolerated. Students found to have committed an act of academic dishonesty may be subject to failure in the course, suspension from the University, or both. Others: Please TURN OFF ALL CELL PHONES. If you have a documented disability and wish to receive academic accommodation, please contact Disability Resources in Student Affairs at (856) , and the Department of Economics, Bunce Hall, at (856)

4 Lectures, Reading Assignments and Due Dates Lecture Date Topic Textbook Assign Turn In I. Chapter 1: Introduction and Overview 1 1/16 (T) An Introduction Labor Economics pp PS#1 2 1/18 (R) An Introduction to Regression Analysis pp II. Chapter 2 and Chapter 3: Labor Supply 3 1/23 (T) Labor Force Basic Facts pp Neoclassical Model of Labor-Leisure Choice 4 1/25 (R) The Hours-of-Work Decision pp /30 (T) The Labor Supply Curve pp /1 (R) Labor Supply over the Life Cycle pp PS#1 7 2/6 (T) Household Production & Fertility Lecture Catch-Up & Midterm Exam Review Exam 2/8 (R) Exam Ch 1-Ch 3 III. Chapter 4: Labor Demand pp /13 (T) Production Function pp Employment Decision Short Run pp /15 (R) Employment Decision Long Run pp /20 (T) Policy Application: Minimum Wage pp IV. Chapter 5: Labor Market Equilibrium 11 2/22 (R) Labor Market Equilibrium pp /27 (T) Policy Application: Payroll Taxes & Subsidies pp /1 (R) Policy Application: Immigration pp PS#2 14 3/6 (T) Lecture Catch-Up & Midterm Exam Review Exam 3/8 (R) Exam Ch 4-Ch 5-3/13 (T) NO CLASS Spring Break - - 3/15 (R) NO CLASS Spring Break - V. Chapter 6: Compensating Wage Differentials PS#2 15 3/20 (T) Risky Jobs Market & Hedonic Wage Function pp PS#3 16 3/22 (R) Policy Application: Safety and Regulations pp Term Paper 17 3/27 (T) Policy Application: Health Insurance pp VI. Chapter 7: Human Capital 18 3/29 (R) Education in the Labor Market pp /3 (T) The Schooling Model pp /5 (R) Schooling and Signaling Theory pp PS#3 21 4/10 (T) Lecture Catch-Up & Midterm Exam Review - Exam 4/12 (R) Exam Ch 6 & Ch 8 VII. Chapter 10: Labor Market Discrimination 22 4/17 (T) Employer Discrimination pp PS#4 23 4/19 (R) Employee & Customer Discrimination pp Term Paper 25 4/24 (T) Statistical Discrimination pp PS#4 26 4/26 (R) Lecture Catch-Up & Final Exam Review Exam TBD Final Examination (Cumulative) 4

5 Article Reading Assignments The following journal articles are placed on reserve at Campbell Library and are also available from various databases (such as JSTOR) and/or from each journal. CH 4: LABOR DEMAND Reading 1: Card, David and Krueger, Alan B., (2000) "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania: Reply," American Economic Review, vol. 90, no. 5, pp CH 5: LABOR MARKET EQUILIBRIUM Reading 2: Card, David E. and DiNardo, John E., (2000) Do Immigrant Inflows Lead to Native Outflows?, The American Economic Review, vol. 90, no. 2, pp CH 7: HUMAN CAPITAL Reading 3: Jaeger, David A. and Page, Marianne E., (1996) Degrees Matter: New Evidence on Sheepskin Effects in the Returns to Education, Review of Economics and Statistics, vol. 78, no. 4, pp CH 10: LABOR MARKET DISCRIMINATION Reading 4: Bodvarsson, Orn B. and Brastow, Raymond T., (1999) A Test of Employer Discrimination in NBA, Contemporary Economic Policy, vol. 17, no.2, pp