The Economics of Work, Wages, and Discrimination

Abstract

The lecture provides an introduction to some of the central issues in labor economics, including the determinants of labor supply, firms' demand for workers, minimum wages, unemployment, wage inequality, immigration, and labor market discrimination. It presents recent empirical research papers on these issues and discusses the empirical challenges related to their research designs.

Objective

After taking this course, students will be able to - analyze the behavior of actors in the labor market within the conceptual framework of economic theory. - explain phenomena such as unemployment, wage inequality, labor market discrimination, and labor market imperfections. - comment on policy-relevant issues such as minimum wages, a universal basic income, immigration, and unemployment insurance. - comprehend and present the results of the relevant empirical studies on these issues. - understand the challenges associated with a causal identification of research questions in the social sciences. - comprehend the idea behind important statistical methods that modern empirical researchers apply to overcome these challenges.

Content

In the course, students will get answers to relevant questions about modern labor markets: Who works, how much, and why? Do people work less if they have a universal (guaranteed) income or pay higher taxes? How does a firm determine its employment? Does a minimum wage reduce the employment of workers it intends to help? How does unemployment arise? What does unemployment insurance do, and what are its effects? What has driven the surge in wage inequality in developed countries in the last decades? What are the effects of immigration on resident wages and employment? Is there wage and hiring discrimination against women, men, and foreigners in the labor market, and why does it arise? After presenting how modern labor economics conceptualizes these issues, the course discusses state-of-the-art empirical research papers that answer these questions. In the context of the topics, the course thus introduces students to basic statistical methods and data analysis techniques, including regression analysis and quasi-experimental methods. Students will also learn how empirical researchers use big data to get from correlations to causality. This introduction to modern applied economics does not require any prior background in economics or statistics. The lecture targets students interested in the functioning of labor markets and the academic debate about specific labor market policies. A second target group is students that want to learn how modern empirical research in labor economics uses big data to analyze central issues in labor economics. Students are expected to participate in the in-class discussions actively. They will also have the opportunity to read and present a key research paper on one of the topics discussed in class. The performance will be assessed based on a written exam at the end of the semester.

Resources