Labor Economics



ECON 771: Advanced Labor Economics IThis course emphasizes the connection between theory and practice. We will focus on econometric issues arising in empirical labor models, including selection bias, instrumental variables, structural versus reduced form estimation, and unobserved heterogeneity. We will also discuss the most commonly used data sets in the field of labor economics.

The course will begin with a comprehensive treatment of human capital formation, including issues arising from self-selection into different levels of schooling (e.g. college versus high school) and selection into training programs. The course will then consider dynamic structural models, again considering selection in these models based on optimizing behavior. Finally, as an introduction to the material in 772, we will look at the labor supply decisions of married women with children, with an emphasis into selection on who enters the labor force.

ECON 772: Population Economics (Advanced Labor Economics II)
The course will build on the material in 771 and first focus on static and lifecycle labor supply decisions (with and without uncertainty) of individuals and households. Next we will consider the static and dynamic demand for labor, including the role of technological change. Next we will consider theoretical and empirical models of unemployment and search. Then we will study program evaluation issues including the use of random assignment (with and without noncompliance), propensity score matching, difference-in-difference estimation, natural experiments, and if time allows, the use of experimental data in estimating and testing structural models.

ECON 773: Microeconometrics for Applied Work and Program Evaluation
The evaluation of economic policy and programs plays a central role in modern Labor Economics, Health Economics, Public Economics and Development Economics. This course is intended to provide students with the econometric tools necessary to carry out this work, such as randomized data, models of causal inference, propensity score methods, instrumental variables and sample selection models, regression discontinuity models, difference-in-differences and duration models. It will also consider several specific applications of program evaluation.

Related Course
ECON 626: Empirical Microeconomics
This course deals with the econometric methods used in microeconomic analysis. The course covers statistical methods that are used to solve identification and estimation issues that arise in the analysis of economic experimental and observational data. During the course we will study linear and non-linear models. Topics discussed during the semester include: Linear Models, Quantile Regression Models, Instrumental Variable Estimators, Panel Data Models (static and dynamic), Discrete Choice Models, Limited Dependent Variables Models and Duration Models. We also introduce structural models and cover some topics related to evaluation of programs and policies.

Field Requirements in Labor Economics

Major field: ECON 771 and 772, and one other course. The third course could be ECON 626, ECON 751 (public finance) or another course chosen in consultation with the labor faculty.

Average grade of B+ or better in courses. Field paper: Proposal due to a faculty member in the field by the end of Spring Semester of the 2nd year. This proposal may be written as part of the coursework in 772. First version of paper due February 1 of third year. If the first version does not pass the field requirement, the student will be notified by February 15 and the second (final) version will be due April 20.

The field paper will be judged based on the quality of the value added by the student submitting the paper. Ideally the paper will become a dissertation chapter for those who choose Labor as their major field. The faculty recognizes, however, that some good ideas do not work out well enough to become part of a dissertation. In such a situation, we will encourage a student to finish up the field paper as early as possible so that the student can begin working on something more promising.

Minor field: ECON 771 and 772. Average grade of B+ or better in courses.