Labor Economics

Course Description

This course is a graduate course in Labor Economics. Its aim is to familiarize students both with the standard theoretical concepts in the analysis of labor markets, as well as with the empirical methodology and evidence. As such, it is complementary to other courses in Labor Economics, but also to courses in Education Economics, Applied Econometrics, and the Economics of Taxation. In addition, it should also be a good preparation for your own empirical work and writing of applied research papers.

Topics include labor supply and labor demand, market power of firms and workers, causes and consequences of immigration, wage polarization and labor market inequality, and intergenerational mobility.

The course is divided into two parts: A weekly lecture running throughout the semester, and a block bootcamp in May/June, focusing on working with real-world data and Stata/R.

Examination

• Final exam (50%): Written exam at the end of the course.
• Bootcamp with a take home exercise (50%).

Meetings

Lectures (taught by Stephan Maurer): Thursday, 15.15-16.45, Room F420

Block Bootcamp (taught by Judith Vornberger): May 24 (15:15-20:15), May 26 (13:30-18:30) and May 27 (all day)

Note: If you cannot attend the bootcamp in May, you may join the bootcamp for bachelor students:  June 5 (15:15-20:15), June 6 (all day) and June 7 (9:15-14:15)

Topics

Lecture

1. The basic model: Labor Supply, Labor Demand, Market equilibrium

2. Market power: Monopoly and Monopsony

3. Labor Market Discrimination

4. Immigration

5. Wage polarization and labor market inequality

6. Intergenerational mobility

R and STATA Bootcamp

In order to understand and replicate previous research or to be able to conduct own research within seminar papers or theses, we will introduce you to common methods of labor market economics research in our bootcamp. During our bootcamp we will replicate some results of the following papers using STATA and R. Therefore, we will use the published datasets and the methods used in the following papers.

Exercise 1:

Topic: Education production function
Paper: Krueger, A. B. (1999). Experimental estimates of education production functions. The quarterly journal of economics, 114(2), 497-532.
Main Method: Linear regression (and do means tests, graphs and descriptive statistics)

Exercise 2:

Topic: The impact of compulsory schooling on earnings

Paper: Angrist, J. D., & Keueger, A. B. (1991). Does compulsory school attendance affect schooling and earnings?. The Quarterly Journal of Economics, 106(4), 979-1014.

Main Method: Instrumental variable approach, OLS, 2-SLS

Exercise 3:

Topic: Impact of minimum wage increase on employment growth and employment changes

Paper: Card, D., & Krueger, A. B. (1993). Minimum wages and employment: A case study of the fast food industry in New Jersey and Pennsylvania.

Main Method: Difference-in-Differences (and replicating summary statistics, graphs, OLS regression)

Exercise 4:

Topic: Effect of alcohol consumption on mortality

Paper: Carpenter, C., & Dobkin, C. (2009). The effect of alcohol consumption on mortality: regression discontinuity evidence from the minimum drinking age. American Economic Journal: Applied Economics, 1(1), 164-82.

Main Method: Regression Discontinuity Design (and replicating graphs