14.64
Labor Economics and Public Policy
Introduces economic models of employment and wage determination and empirical analysis of the labor market. Topics include: supply and demand, minimum wages, labor market effects of social insurance and welfare programs, the collective bargaining relationship, discrimination, human capital, and unemployment. Completion of or concurrent enrollment in 14.03 or 14.04 , and 14.32 recommended. Students taking graduate version complete additional assignments.
Fall 2009
This course is an introduction to labor economics with an emphasis on applied microeconomic theory and empirical analysis. We are especially interested in the link between research and public policy. Topics to be covered include: labor supply and demand, taxes and transfers, minimum wages, immigration, human capital, education production, inequality, discrimination, unions and strikes, and unemployment.
Readings
- [Borjas] = Borjas, George J. Labor Economics . 5th ed. Boston, MA: McGraw-Hill/Irwin, 2010. ISBN: 9780073511368.
- This edition differs little from the 4th edition, which you may also use, though note changes in chapter and section numbers:
- Borjas, George J. Labor Economics . 4th ed. Boston, MA: McGraw-Hill/Irwin, 2008. ISBN: 9780073402826.
- [Angrist and Krueger] = Angrist, Joshua, and Alan Krueger. “Empirical Strategies in Labor Economics.” Chapter 23 in The Handbook of Labor Economics . Vol. 3A. Edited by Orley C. Ashenfelter and David Card. San Diego, CA: Elsevier, Inc., 1999, pp. 1277-1366. ISBN: 9780444501875.
- For a more advanced and detailed discussion than the Angrist and Krueger handbook chapter:
- Angrist, Joshua, and Jörn-Steffen Pischke. Mostly Harmless Econometrics: An Empiricist’s Companion . Princeton, NJ: Princeton University Press, 2009. ISBN: 9780691120355.
- [Nicholson and Snyder] = Nicholson, Walter, and Christopher Snyder. Microeconomic Theory: Basic Principles and Extensions . 10th ed. Mason, OH: Thomson/South-Western, 2008. ISBN: 9780324585070.
- [Deaton and Muellbauer] = Deaton, Angus, and John Muellbauer. Economics and Consumer Behavior . New York, NY: Cambridge University Press, 1980. ISBN: 9780521296762.
- [Blau, et al.] = Blau, Francine D., Marianne A. Ferber, and Anne E. Winkler. The Economics of Women, Men, and Work . 6th ed. Upper Saddle River, NJ: Prentice-Hall, 2009. ISBN: 9780136084259.
- [Lang] = Lang, Kevin. Poverty and Discrimination . Princeton, NJ: Princeton University Press, 2007. ISBN: 9780691119540.
- Introduction
- [Borjas] chapter 1, including the Appendix; chapter 4.
- Empirical methods: regression and differences-in-differences
- Application: do immigrants take jobs from natives?
- Johnson, George E. “The Labor Market Effects of Immigrants.” Industrial and Labor Relations Review 33, no. 3 (April 1980): 331-341.
- [Borjas] chapter 2.
- [Nicholson and Snyder] chapters 2-5. (math and microeconomics review)
- [Deaton and Muellbauer] chapters 1-4 and 11.
- Application: welfare and earned income tax credit (EITC)
- Moffitt, Robert. “Welfare Programs and Labor Supply.” Chapter 34 in The Handbook of Public Economics . Vol. IV. Edited by Alan J. Auerbach and Martin Feldstein. Amsterdam, The Netherlands: North-Holland, 2002, pp. 2394-2430. ISBN: 9780444823151.
- Application: intertemporal substitution on the road and at the ballpark
- Income effects on labor supply
- Unemployment and unemployment insurance
- [Borjas] chapter 12.
- [Blau, et al.] chapter 4.
- Empirical methods: instrumental variables
- Application: children and their parents’ labor supply
- [Borjas] chapter 3.
- [Nicholson and Snyder] chapters 9-11.
- Applications: minimum wages and labor supply shifts
- [Borjas] chapter 6.
- Applications: the economic returns to all sorts of human capital
- Applications: education production
- Card, David. “The Causal Effect of Education on Earnings.” Chapter 30 in The Handbook of Labor Economics . Vol. 3A. Edited by Orley Ashenfelter and David Card. Amsterdam, The Netherlands: North Holland, 1999, pp. 1801-1863. ISBN: 9780444501875.
- [Borjas] chapter 7.
- Katz, Lawrence, and David Autor. “Changes in the Wage Structure and Earnings Inequality.” Chapter 26 in The Handbook of Labor Economics . Vol. 3A. Edited by Orley Ashenfelter and David Card. San Diego, CA: Elsevier, 1999, pp. 1463-1555. ISBN: 9780444501875.
- [Borjas] chapter 9.
- [Blau, et al.] chapter 7.
- [Lang] chapters 10-14.
- Application: the effects of anti-discrimination policy
- [Borjas] chapter 10.
- Farber, Henry. “Analysis of Union Behavior.” Chapter 18 in The Handbook of Labor Economics . Vol. II. Edited by Orley Ashenfelter and Richard Layard. Amsterdam, The Netherlands: North-Holland, 1986, 1039-1089. ISBN: 9780444878571.
- Union relative wage effects
- Lewis, H. Gregg. Union Relative Wage Effects: A Survey . Chicago, IL: University of Chicago Press, 1986. ISBN: 9780226477213.
- Borjas, George J. Labor Economics . 5th ed. Boston, MA: McGraw-Hill/Irwin, 2010. ISBN: 9780073511368.
Prerequisites & course information
Subject meets with 14.640 Prereq: 14.30 or permission of instructor U (Spring) 4-0-8 units. HASS-S
Sources
- Course catalogue ↗2026–2027
- MIT OpenCourseWare ↗Fall 2009
- MIT OCW readings ↗
- MIT OCW syllabus ↗
- Historical MIT OpenCourseWare offering. Named reading entries and schedule topics are automatically extracted from the linked source pages.