LABOUR ECONOMICS 2 February 2004 1 th. lecture Overview over lecture Introduction to course Topic: Labour supply Motivation Optimisation: One worker/consumer 1. Optimisation problem 2. 1st. order conditions 3. Illustration 4. Comparative statics (slutsky-equations) 5. Reservation wage 6. Tax-effects READING LIST: F & V, Ch. 1 and Ch. 2. NEXT TIME: Labour supply continued
LABOUR ECONOMICS 6 February 2004 2 th. lecture Overview over lecture Topic: Labour supply *Motivation Optimisation: One worker/consumer 1. *Optimisation problem 2. *1st. order conditions 3. Illustration 4. Comparative statics (slutsky-equations) 5. Reservation wage 6. Tax-effects READING LIST: F & V, Ch. 1 and Ch. 2. NEXT TIME: Labour supply continued
LABOUR ECONOMICS 9 February 2004 3 th. Lecture, Overview over lecture Topic: Labour supply 1. *Motivation 2. Optimisation: One worker/consumer a) *Optimisation problem b) *1st. order conditions c) *Illustration d) *Comparative statics (slutsky-equations) e) *Reservation wage f) Tax-effects 3. The family as supplier of working hours 4. Home production 5. Leisure as a production factor (Becker). 6. Intertemporal allocation of working time Reading list: F & V, Ch. 1 and Ch. 2. Next time: Labour supply continued
LABOUR ECONOMICS 13 February 2004 4 th. Lecture, Overview over lecture Topic: Labour supply 1. * Motivation 2. * Optimisation: One worker/consumer 3. * The family as supplier of working hours 4. * Home production 5. * Leisure as a production factor (Becker). 6. Intertemporal allocation of working time 7. Estimation techniques Main problem: Sample selection Explained "Solved" 8. Empirical assessment: Nina s article - estimation procedure (modification of variables) - results Reading list: F & V, Ch. 1 and Ch. 2. Next time: Labour supply continued
LABOUR ECONOMICS 16 February 2004 5 th. Lecture, Overview over lecture Topic: Labour supply 1. * Motivation 2. * Optimisation: One worker/consumer 3. * The family as supplier of working hours 4. * Home production 5. * Leisure as a production factor (Becker). 6. * Intertemporal allocation of working time 7. Estimation techniques Main problem: Sample selection * Explained "Solved" 8. Empirical assessment: Nina s article - estimation procedure (modification of variables) - results Reading list: F & V, Nina s article Next time: Labour demand
LABOUR ECONOMICS 20 February 2004 6 th. Lecture, Overview over lecture A. Topic: Labour supply Empirical assessment: Nina s article - * estimation procedure (modification of variables) - results B. TOPIC: Labour demand 1. Motivation 2. Concepts - Elasticity of substitution - Marshall-Hicks equations 3. Production functions - Cobb-Douglas -CES - Multifactor production functions 4. The elasticity of complementarity 5. Some results Reading list: Nina s article, Hamermesh Next time: Labour demand, Johnson
LABOUR ECONOMICS 23 February 2004 7 th. Lecture, Overview over lecture A. TOPIC: Labour demand 1. * Motivation 2. * Concepts - Elasticity of substitution - Marshall-Hicks equations 3. Production functions - * Cobb-Douglas -CES - Multifactor production functions 4. The elasticity of complementarity 5. Some results B. TOPIC: Labour demand, skill bias - the concept - demand and supply factors (formula) - empirical evidence - explanations Reading list: Hamermesh, Johnson Next time: Human Capital
LABOUR ECONOMICS 27 February 2004 8 th. Lecture, Overview over lecture A. TOPIC: Labour demand, skill bias - the concept - demand and supply factors (formula) - empirical evidence - explanations B.TOPIC: WAGES AND INCOME Main theme: Reward to education 1. Human capital theory (investment calculation) - Formal education - Experience and on the job training 2. Human capital - empirical investigations - Mincer s schooling equation - Ability and school attendance 3. Other topics - Signaling - Discrimination Reading list: Johnson, F. & V. Next time: Human Capital
LABOUR ECONOMICS 1 March 2004 9 th. Lecture, Overview over lecture TOPIC: WAGES AND INCOME A. Theory, Main theme: Reward to education 1. *Human capital theory (investment calculation) - Formal education - Experience and on the job training 2. Human capital - empirical investigations - Mincer s schooling equation - Ability and school attendance 3. Other topics - Signaling - Discrimination B. Empirical evidence: Nordic countries - return to education - return to experience Reading list: F. & V., Becker, Nordic paper Next time: Human Capital
LABOUR ECONOMICS 5 March 2004 10 th. Lecture, Overview over lecture I. TOPIC: WAGES AND INCOME A. Theory, Main theme: Reward to education 1. *Human capital theory (investment calculation) 2. * Human capital - empirical investigations 3. Other topics - * Signaling - Discrimination B. Empirical evidence: Nordic countries - return to education - return to experience II. TOPIC: trade unions 1. The monopoly trade union. Characteristics: - The trade union determines the wage rate - The firm determines employment a. determination of optimum b. comparative statics 2. Efficient contracts, Negotiation on: Wage rate and employment Reading: F & V, Ch. 5, Becker, Niels Westergaard Nielsen et. al., Oswald. NEXT TIME: Trade Unions, Oswald + Moene
LABOUR ECONOMICS 8 March 2004 11 th. Lecture, Overview over lecture TOPIC: trade unions 1. The monopoly trade union. Characteristics: - The trade union determines the wage rate - The firm determines employment a. determination of optimum b. comparative statics 2. Efficient contracts Negotiation on: Wage rate and employment 3. Right to manage model Reading: Oswald. NEXT TIME: Trade Unions, Oswald + Moene
LABOUR ECONOMICS 12 March 2004 12 th. Lecture, Overview over lecture A. Unions, GENERAL 1. * The monopoly trade union. Characteristics: - The trade union determines the wage rate - The firm determines employment a. determination of optimum b. comparative statics 2. Efficient contracts Negotiation on: Wage rate and employment 3. Right to manage model B. NORDIC: Solidaristic bargaining? 1. The Rehn-Meidner model 2. A putty clay growth model interpretation Reading: Oswald + Moene & Wallerstein NEXT TIME: Temporary Layoffs (Feldstein)
LABOUR ECONOMICS 15 March 2004 13 th. Lecture, Overview over lecture TOPIC: Temporary layoffs (contract theory) - definition - states: one good and one bad - model -FOC - interpretation (policy) READING: Feldstein NEXT TIME: Search theory (Mortensen)
LABOUR ECONOMICS 19 March 2004 14 th. Lecture, Overview over lecture TOPIC: Search 1. Basic model: Transition from unemployment to employment - assumptions - the Bellman equation (optimality expression) - the reservation wage - expected spell length - comparative statics 2. Extensions of basic model - non-stationarity - search on the job - learning process about the job READING: Mortensen NEXT TIME: Search theory (Mortensen)
LABOUR ECONOMICS 22 March 2004 15 th. Lecture, Overview over lecture TOPIC: Search 1. Basic model: Transition from unemployment to employment - * assumptions - * the Bellman equation (optimality expression) - * the reservation wage - expected spell length - comparative statics 2. Extensions of basic model - non-stationarity - search on the job - learning process about the job READING: Mortensen NEXT TIME: Search theory (Mortensen)
LABOUR ECONOMICS 26 March 2004 16 th. Lecture, Overview over lecture TOPIC: Search 1. Basic model: Transition from unemployment to employment - * assumptions - * the Bellman equation (optimality expression) - * the reservation wage - *expected spell length - *comparative statics 2. Extensions of basic model - non-stationarity - search on the job - learning process about the job READING: Mortensen Next time: Lancaster
LABOUR ECONOMICS 29 March 2004 17 th. Lecture, Overview over lecture A. TOPIC: Search - Theory 1. Basic model: Transition from unemployment to employment 2. Extensions of basic model - * non-stationarity - * search on the job - learning process about the job B. TOPIC: Search - empirical analysis of spell lengths 1. The hazard function 2. Sampling scheme and likelihood 3. The Weibull distribution 4. Unobserved heterogeneity Reading: Mortensen, Lancaster Next time: Lancaster, Pissarides
LABOUR ECONOMICS 2 April 2004 18 th. Lecture, Overview over lecture A. TOPIC: Search - empirical analysis of spell lengths 1. * The hazard function 2. Sampling scheme and likelihood 3. The Weibull distribution 4. Unobserved heterogeneity B.TOPIC: Search theory - macro model Analysis of flows on the labour market Sectors: Trade sector (new) Production sector 1. Deduction of basic model - Job creation - Wage curve - uv-curve 2. Interpretation of basic model Reading: Lancaster, Pissarides Next time: Pissarides
LABOUR ECONOMICS 5 April 2004 19 th. Lecture, Overview over lecture TOPIC: Search theory - macro model Analysis of flows on the labour market Sectors: Trade sector (new) Production sector 1. Deduction of basic model - Job creation - Wage curve - uv-curve 2. Interpretation of basic model Reading: Pissarides Next time: Pissarides
LABOUR ECONOMICS 16 April 2004 20 th. Lecture, Overview over lecture TOPIC: Search theory - macro model Analysis of flows on the labour market Sectors: Trade sector (new) Production sector 1. Deduction of basic model - * uv-curve - Job creation - Wage curve 2. Interpretation of basic model Reading: Pissarides Next time: Layard et al.
LABOUR ECONOMICS 19 April 2004 21 th. Lecture, Overview over lecture A. TOPIC: Search theory - macro model A couple of graphs illustrating the relevance of the analysis B, TOPIC: Efficiency wages 1. Deduction of the Solow condition 2. The 5 reasons for efficiency wage effects 4. The Macro level 5. Evidence: i. Inter-industry wage differentials? ii. Absenteeism? Reading: Layard et al., Edin & Zetterberg Next time: Blanchard
LABOUR ECONOMICS 23 April 2004 22 th. Lecture, Overview over lecture A. TOPIC: Efficiency wages 1. * Deduction of the Solow condition 2. * The 5 reasons for efficiency wage effects 4. The Macro level 5. Evidence: i. Inter-industry wage differentials? ii. Absenteeism? B. TOPIC: Persistence, Unemployment Channels for persistence: 1. Capital accumulation 2. Wage negotiations a. Hysteresis models b. Unemployment and wage negotiations (u up, w down) c. Duration effects (long term unemployed not efficient job seekers) Reading: Layard et al., Edin & Zetterberg, Blanchard Next time: Employment protection (Bertola)
LABOUR ECONOMICS 26 April 2004 23 th. Lecture, Overview over lecture A. TOPIC: Persistence, Unemployment Channels for persistence: 1. Capital accumulation 2. Wage negotiations a. Hysteresis models b. Unemployment and wage negotiations (u up, w down) c. Duration effects (long term unemployed not efficient job seekers) B. TOPIC: Employment protection - Theory 1. Motivation 2. Model: two-state model incl. firing costs 3. Consequences - employment fluctuation - employment level 4. Wage formation 5. Ideosyncratic shocks and wage compression 6. Concluding remarks Reading: Blanchard, Bertola Next time: Employment protection (Bertola)
LABOUR ECONOMICS 30 April 2004 24 th. Lecture, Overview over lecture TOPIC: Employment protection - Theory 1. *Motivation 2. Model: two-state model incl. firing costs 3. Consequences - employment fluctuation ideosyncratic shocks business cycle - employment level 4. Wage formation 5. Ideosyncratic shocks and wage compression 6. Concluding remarks Reading: Bertola Next time: Employment protection (Bertola + Albæk et al.)
LABOUR ECONOMICS 3 May 2004 25 th. Lecture, Overview over lecture TOPIC: Employment protection - Theory 1. *Motivation 2. * Model: two-state model incl. firing costs 3. * Consequences - employment fluctuation ideosyncratic shocks business cycle - employment level 4. Wage formation 5. Ideosyncratic shocks and wage compression 6. Concluding remarks Reading: Bertola+ Albæk et al. Next time: Nickell
LABOUR ECONOMICS 10 May 2004 26 th. Lecture, Overview over lecture A. TOPIC: Employment protection - Theory - some graphs and conclusion B. TOPIC: Employment protection - Empirical evidence Displaced workers in Belgium and Denmark: - Subsequent unemployment and employment - Subsequent wages and income C. TOPIC: Unemployment and Labor Market Regidities Impact on unemployment level (and LF participation) - short-run - long-run Differences in institutions - direct rigidities - treatment of unemployed - wage determination and unions - labour taxes Reading: Bertola+ Albæk et al. + Nickell Next time: Borjas
LABOUR ECONOMICS 17 May 2004 27 th. Lecture, Overview over lecture A. TOPIC: Unemployment and Labor Market Regidities Impact on unemployment level (and LF participation) - short-run - long-run Differences in institutions - direct rigidities - treatment of unemployed - wage determination and unions - labour taxes B. TOPIC: Immigration The Roy model Reading: Nickell + Maddala Next time: Borjas
LABOUR ECONOMICS 21 May 2004 28 th. Lecture, Overview over lecture A. TOPIC: The Roy model (continued) B. TOPIC: Immigration - skills of immigrants: theory - impact on host country economy (income and wages) - skills of immigrants: empirics Reading: Maddala + Borjas Next time: Borjas + OECD