39069 - Labor Economics

Learning outcomes

At the end of the course student has knowledge of a detailed analysis of the main areas in labor economics, both from a theoretical and an empirical perspective. Topics include the analysis of labor supply by individual and households, labor demand by firms, equilibrium wage differentials and employment outcomes resulting from the interaction of such supply and demand, education and human capital, life-cycle profiles, job search models, and labor market institutions. At the end of the course student has an understanding of how labor markets work and possess the basic tools to undertake original research in the field.

Course contents

This course is intended for graduate students with an interest in macro labor economics. We will cover the main concepts of labor search, and survey the workhorse models of the labor market (both in discrete and continuous time). These models are designed to study equilibrium unemployment and to explain the patterns of workers' transition across different firms, and the existence of wage inequality across seemingly identical workers. Moreover, these models also allow to evaluate the effects of labor market policy.
We will first introduce some basic mathematical preliminaries and the earliest search models characterized by an exogenous wage distribution or wage posting. We will then move to study the classic random search model with Nash bargaining, with a focus on its efficiency and business cycle properties. Next, we will turn to directed search models, highlighting the main differences with respect to the previous generation of models.
In the last lectures, we will focus on heterogeneity and sorting in the labor market. Finally, if time allows, we will study the effects of unemployment insurance on the labor market, relating this to the current policy debate.

Readings/Bibliography

See references in the detailed Syllabus available at:

https://sites.google.com/site/salvatorelobello1988/home/teaching

Teaching methods

Lectures

Assessment methods

The final grade will be based on:

1. homeworks assigned during the quarter (30%);
2. a 30-minute presentation in class (50%), to be done in pairs;
3. one last assignment (20%) to be done in groups of 2-3 people, among:

• A referee report;
• A computational project.
  

Teaching tools

Class slides & Talk

Office hours

See the website of Salvatore Lo Bello