Objectives:

At the end of the semester, students should understand:

• what determines how much (if any) labor an individual is willing to supply
• how businesses decide how many workers (and what types of workers) to employ
• how the supply of and demand for labor determine the equilibrium wage rate and level of employment
• the effects of education and training on wages
• how job amenities and employee benefits alter wages
• the effects of discrimination on earnings

Required Textbook:

Kaufman, Bruce E. and Julie L. Hotchkiss. The Economics of Labor Markets, 7th edition. Thomson/South-Western Publishing, 2006.

Grading:
Grades will be determined using a 10-point scale. There will be no "curve". Final grades will be comprised of:

• Homework        20 percent
• 3 unit exams     80 percent

Please note:
If you have a documented disability and wish to receive academic accomodations, please contact me and the Coordinator of Disability Services (581-6583) as soon as possible.

Policies:
Homework
We will have several homework assignments throughout the semester. These will be given at the end of class and will be due by the beginning of the next class period. Since we will have many assignments, I will drop your lowest homework grade in determining your final homework average. Therefore, NO late homework assignments will be accepted (regardless of whether the absence is excused or not). If you miss class when an assignment is given, it is your responsibility to get a copy of the assignment and complete it by the due date. No late homework assignments will be accepted at any time - no excuses!

Answers to Homework:

Homework1

Homework2

Homework4 REVISED!

Homework5

Homework7

Homework8

Attendance
Regular attendance is necessary for you to understand the material covered in this course. While I will not make attendance an explicit part of your grade, keep in mind that it may be used in determining the final grade for a student whose average is near a borderline.

Exams
All exams will consist of short-answer essay questions and problems. The final exam is NOT cumulative. However, the last unit exam will be given during the final exam time. If you miss an exam and provide me with a legitimate (and properly documented) excuse BEFORE the exam, you will have the option of increasing the weight of your remaining exams or taking a make-up exam (which must be taken before or during the next class period following the exam). If you miss an exam and do not provide me with a legitimate excuse beforehand, you will receive a grade of zero for that exam.

Review Questions for Exams:

Exam 1

Exam 2

Exam 3

Course Outline: [Dates are subject to change.]

I. Introduction

Key points:

• coverage of syllabus
• scope and content of labor economics

II. Introduction to the Labor Market

Key points:

• unique features of the labor market
• labor market outcomes
• the labor market process
• labor market theories

Reading:
Chapter 1

III. Labor Supply

Key points:

• the patterns of hours of work
• the theory of the labor/leisure choice
• income-maintenance programs and labor supply
• labor force participation rates by demographic characteristics
• time & money costs of working
• labor force participation
• the decision to work
• household labor supply
• labor force participation rates over time

Reading:
Chapters 2, 3

IV. The Theory of Human Capital - Part I

Key points:

• the theory of human capital
• schooling & the distribution of individual earnings

Reading:
Chapter 7 (pp. 326-353; 373-379)

Exam 1 - Thursday, February 22th (REVISED!!)

V. The Demand for Labor

Key points:

• the marginal productivity theory of labor demand
• criticisms of the theory of labor demand
• the elasticity of demand for labor
• the relationship between product demand and labor demand
• the pattern of capital/labor substitution
• how competitive firms determine the profit-maximizing level of labor to hire
• the theory of labor demand in the long run
• the determinants of the elasticity of labor demand
• technological change and labor demand
• productivity growth and the demand for labor

Reading:
Chapters 4, 5

VI. The Determination of Wages

Key points:

• wage determination in competitive markets
• wage determination in a monopsony market
• the minimum wage and market adjustments

Reading:
Chapter 6

Exam 2 - Tuesday, April 3rd (REVISED!!)

VII. The Theory of Human Capital - Part II

Key points:

• on-the-job training

Reading:
Chapter 7 (pp. 354-369)

VIII. Occupational Wage Differentials

Key points:

• compensating wage differentials
• job attributes & employee benefits
• occupational licensing
• government regulation of occupational safety & health conditions

Reading:
Chapter 8

IX. Discrimination in the Labor Market

Key points:

• theories of market discrimination
• discrimination & life cycle earnings
• the market discrimination coefficient
• the measurement of discrimination
• economic progress of blacks & women
• government programs to combat discrimination

Reading:
Chapter 9