ECON 320: LABOR ECONOMICS
Professor Robert J. Lemke
Department of Economics and Business
Lake Forest College
Fall 2011
Contact Information:
Office: 418 Young Hall
Phone: 847-735-5143
E-mail: lemke@lfc.edu
Web: http://campus.lakeforest.edu/~lemke/
Course Description:
Econ 320: Labor Economics. Standard theories of labor economics are developed. Topics include labor supply, labor demand, education, discrimination, contracting, and unions. Particular emphasis is given to the labor force participation of married women and single mothers, earnings, wage distributions and inequality, job training, and unemployment benefits. Empirical analysis complements theoretical modeling, especially in the areas of women's work and international comparisons regarding labor laws and labor market outcomes. Prerequisite: Economics 210. Cross-listed as Women's and Gender Studies 320.
Labor economics concerns the organization and opperation of labor markets. Why do people work? Why are different people willing to work the same job at different wages? What factors determine how much labor a firm employs? How does the interaction of people willing to work and firms wanting to hire workers determine the distribution of wages observed in the economy? What is the purpose of unions, and how do they affect the labor market equilibrium? Why is there unemployment? Can unemployment be good?
The distribution of wages in an economy is the result of labor market equilibrium. In the context of such an equilibrium, many other questions arise. How valuable is education? Why don't all jobs pay the same wage? How does labor market mobility affect the wage distribution? How can public policy affect who works and at what wage? Which public policies are most likely to alleviate poverty? How can we identify discrimination in the labor market? What forces fight discrimination?
In order to better understand labor economics, we will approach all of these questions in three ways. We will look at data and statistics to better understand the U.S. and foreign labor markets. We will develop the economic theory of labor markets. And we will consider the role of public policy. This class will require that you remember what you learned in Econ 210. We will review some things from time to time, but for the most part I expect you remember things such as utility maximization (indifference curves, preferences, optimal choice theory) and profit maximization (demand functions, production functions, cost functions, isoquants).
Course Objectives and Expectations:
I expect you will devote a substantial amount of time to the course each week. This includes but is not limited to reading the textbook and journal articles, taking good notes and studying them, working all of the assigned problems, producing a very well-writen and informative paper, and preparing and delivering two PowerPoint presentations. Upon completion of this course, you will be able to discuss labor issues intelligibly. You will have improved your problem-solving and writing skills. Your analytic and mathematical skills will be more highly developed. And you will have developed and delivered two PowerPoint presentations.
Texts:
We will be using Labor Economics, 5th Edition, George J. Borjas, McGraw-Hill Irwin Publishing, 2010 (ISBN: 978-0-07-351136-8). You can purchase the textbook in the college bookstore, but feel free to buy it anywhere. You can also share the textbook with a friend if you wish, but I expect everyone will read the textbook. I will put additional materials on Moodle.
Class:
Class meets 9:30 - 10:50 on Tuesdays and Thursdays in 517 Young Hall. Daily attendance and active participation in classroom discussions are expected. I reserve the right to lower the grade of any student who does not fully participate during classtime, is cronically absent or tardy, or exhibits disruptive behavior. Class will most often be characterized as interactive lecture. I expect you will be active in helping the lecture move through the material by asking and answering questions.
Office Hours:
Office hours are from 8:30 - 9:30 and 11:00 - 12:00 on Tuesdays and Thursdays and by appointment. Outside of stopping by my office, the best way to contact me is by e-mail at lemke@lakeforest.edu. You can also phone my office (x5143), my home (847-457-3219), or my cell (847-224-8928).
Multiple Choice Review Questions:
In preparation for class lecture, you will be asked to read the chapter from the textbook and answer 30 multiple choice questions on the chapter. You must complete these questions on your own, without help from your classmates. The multiple choice questions and a generic answer sheet have been posted to Moodle. Your performance on the multiple choice review questions will determine 10 percent of your final grade.
Problem Sets:
You are permitted (and encouraged) to work the problem sets with other students, but be sure to work the problems by yourself before meeting with your group. Once your group meets, all participating members can turn in a single set of answers. If your group's answers are not neatly written, I will require you to type your answers. Your performance on problem sets will determine 10 percent of your final grade.
Exams:
There will be two midterm exams plus a final exam. The final exam will take place from 1:30 - 4:30 on Friday, Dec. 9. Each midterm exam will determine 15 percent of your final grade, while the final exam will determine 20 percent. Make-up exams will be given only in unforeseeable and extraordinary situations.
Paper:
You must write a paper concerning any labor topic of your choice. The paper must be well-written and clear. The paper should present an idea or an event and discuss the current understanding of the situation. For example, you might write on the decline of private-sector unionism, the increase in public-sector unionism, immigration policy, recent changes in college enrollment, the female wage gap, empirical evidence concerning the EITC, etc.
Make sure your paper is clear and to the point. A paper that summarizes three or four cutting-edge journal articles on a particular question and explains why the topic is relevant and where the literature is headed is a good format for your paper to follow. This is not original research, so be sure to attribute what you say to appropriate sources. You must clear the topic with me before you write. The technical details are the following: max seven pages, title and name on first page (and a bunch of writing), references on the last page (with no writing), Times Roman 12 point font throughout, double spaced, one inch margins, and all paged numbered. You must have at least 3 non-Internet sources.
The paper is due on Tuesday, November 8. Everyone will make a 15 to 20 minute PowerPoint presentation of his or her paper to the class. Presentations will begin on November 8. The paper will determine 15 percent of your final grade. The presentation will determine 5 percent of your final grade.
Group Presentation:
Following paper presentations, we will start our final topic -- the U.S. education system -- by reading several papers as a class. After Thanksgiving break, everyone will be assigned to work with one of three groups. Each group will then lead class for an entire day (Nov. 29, Dec. 1, or Dec. 6). The groups will lead the class through a paper or two on the education topic of their choosing. The group must make a PowerPoint presentation, but it can also use other visual aids (the board, audio clips, movie clips, etc.) to best present its material. It is up to the group to decide what material to present and how best to present it. This presentation will determine 10 percent of your final grade -- with each member in the group receiving the same "content" grade worth 7 percent and an individual "professional presentation" grade worth 3 percent.
Grading Policy:
Your overall weighted percentage for the class will depend on multiple choice review problems (10%), problem sets (10%), exams (50%), paper (15%), paper presentation (5%), group presentation (7%), and individual performance in the group presentation (3%). The conversion of your overall percentage into a letter grade will follow the standard 90, 80, 70, 60 schedule with pluses and minus assigned as usual.
Tentative Schedule:
| Chapter 1. Introduction to Labor Economics |
| Chapter 2. Labor Supply |
| Chapter 6. Human Capital |
| Chapter 3. Labor Demand |
| Chapter 4. Labor Market Equilibrium |
| Exam 1 |
| Chapter 12. Unemployment |
| Chapter 9. Labor Market Discrimination |
| Chapter 5. Compensating Wage Differentials |
| Chapter 11. Incentive Pay |
| Chapter 8. Labor Mobility |
| Chapter 10. Labor Unions |
| Chapter 7. The Wage Structure |
| Exam 2 |
| Unit on U.S. Education System |
| Final Exam |