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1 Econ 4800 Labor Economics and Industrial Relations Autumn Semester 2012, Arps Hall 0384 Mondays, Wednesdays & Fridays 9:10 am 10:05 am Department of Economics, The Ohio State University Instructor: Dimitrios Nikolaou Office: Arps Hall Office Hours: Mon/Wed 10:30 11:30 am and by appointment DESCRIPTION This course is an upper level economics elective, which provides students with an introduction into labor markets. We will discuss models for behavior, incorporating labor supply and labor demand. Topics within labor economics, such as investments in human capital, discrimination, job search, and time permitting, family formation, will also be covered. Throughout the course we will investigate multiple questions. These questions include but are not limited to: How do individuals decide how many hours to work? How is a person s salary determined? What are the benefits associated with attaining a college degree? Is there convincing evidence of discrimination? Of course, if there is interest for a topic not included in the syllabus, we can adjust the lectures respectively. TEXTBOOK The required textbook for this course is: Derek Laing, Labor Economics: Introduction to Classic and New Labor Economics, 1 st edition, W.W. Norton & Company Inc., ISBN: Some of the chapters we will cover are not included in the textbook but are available as supplementary chapters on the publisher s website ( and can be accessed without any extra cost. 1

2 REQUIREMENTS Your grade will be based on five problem sets (20%), two midterm exams (40%), one final exam (30%) and participation in the discussion of the practice problems (10%). An alternative grade breakdown will be provided for students who do not do very well in the midterm exams but do better in the final; 30% for the midterms and 40% for the final exam. Your score will be calculated using both point allocations, and the highest score will be chosen automatically. The five problem sets will be assigned on a tri weekly basis with the due dates indicated in the following table. Your lowest score will be dropped and only the four highest grades on the problem sets will count towards your final grade. You are advised to work in groups, but each one of you has to turn in his/her own work at the beginning of the class on the specified due date. No late homework will be accepted without a valid excuse. Extra credit is available in the form of pop quizzes which will add a maximum of 10% to your overall final grade. Nevertheless, you will not be eligible for the extra credit if you miss more than two quizzes. Knowing how to correctly answer the questions on the problem sets and the pop quizzes is essential to doing well in this course. EXAMS Midterm Exam 1: Monday October 1, 9:10 am 10:05 am, Arps Hall Midterm Exam 2: Friday November 2, 9:10 am 10:05 am, Arps Hall Final Exam: Wednesday December 12, 8:00 am - 9:45 am, Arps Hall You are responsible for all material covered in class, your notes and the book. The final exam will be comprehensive with an emphasis on new material. All exams will contain short answer and essay type questions similar to the format of the in class quizzes. Notes are not permitted during the exams, but you may have a calculator. There will be a make up exam for the midterm, if and only if, you have a valid excuse or a doctor s note for missing the midterm and if you send me an e mail before the exam date. If there is a valid reason for missing the final exam, you will be given a make up exam either the week before the exams week or during the first week of Spring Semester The curve I will use to assign your final grades, after having taken into account the problem sets, the participation, the midterms, the final and the pop quizzes is as follows: A % A % B % 2

3 B % B % C % C % D % D % E Below 35% OTHER RESOURCES For any concerns and questions you may have on the course material during the semester you should arrange to meet with me as early during the semester as possible. Other resources available to you are: 1. Supplementary books: Students who are interested in examining an alternative resource on the topics we will cover throughout the semester can have a look at Modern Labor Economics: Theory and Public Policy by Ehrenberg and Smith or Labor Economics by Borjas. However, these are only recommended resources and they should not be used as a substitute to Laing s main textbook. 2. Economics Learning Center: The Department of Economics runs the Economics Learning Center, where advanced undergraduates provide free tutoring for students in Economics 2000, 2001, 4001, and Assistance with other classes is frequently available. The Economics Learning Center is located in 311 Arps Hall (1945 North High Street) and is typically open from 9am 5pm Monday Friday starting the second (full) week of the semester. Note that the purpose of the tutoring center is not to provide answers to assignments, but to help students learn economics. As the student, you are ultimately responsible for all course work you submit. 3. Counseling Services: Taking care of yourself is extremely important. A recent American College Health Survey found stress, sleep problems, anxiety, depression, interpersonal concerns, death of a significant other, and alcohol use among the top ten health impediments to academic performance. Students experiencing personal problems or situational crises during the semester are encouraged to contact the OSU Counseling and Consultation Services ( ) for assistance, support and advocacy. This service is free and confidential. 3

4 ACADEMIC MISCONDUCT Academic integrity is essential to maintaining an environment that fosters excellence in teaching, research, and other educational and scholarly activities. Thus, The Ohio State University and the Committee on Academic Misconduct (COAM) expect that all students have read and understand the University s Code of Student Conduct, and that all students will complete all academic and scholarly assignments with fairness and honesty. Students must recognize that failure to follow the rules and guidelines established in the University s Code of Student Conduct and this syllabus may constitute Academic Misconduct. The Ohio State University s Code of Student Conduct (Section ) defines academic misconduct as: Any activity that tends to compromise the academic integrity of the University, or subvert the educational process. Examples of academic misconduct include (but are not limited to) plagiarism, collusion (unauthorized collaboration), copying the work of another student, and possession of unauthorized materials during an examination. Ignorance of the University s Code of Student Conduct is never considered an excuse for academic misconduct, so I recommend that you review the Code of Student Conduct and, specifically, the sections dealing with academic misconduct. If I suspect that a student has committed academic misconduct in this course, I am obligated by University Rules to report my suspicions to the Committee on Academic Misconduct. If COAM determines that you have violated the University s Code of Student Conduct (i.e., committed academic misconduct), the sanctions for the misconduct could include a failing grade in this course and suspension or dismissal from the University. If you have any questions about the above policy or what constitutes academic misconduct in this course, please contact me. Students with disabilities that have been certified by the Office for Disability Services will be appropriately accommodated, and should inform the instructor as soon as possible of their needs. The Office for Disability Services is located in 150 Pomerene Hall, 1760 Neil Avenue; telephone , TDD ; 4

5 COURSE OUTLINE Week Date Topics Readings Week Date Topics Readings 1 08/22 Syllabus and General Information 08/24 Labor Demand and Labor Supply Ch. 1 08/27 Adjustments to the Market Ch. 1 10/22 General on Human Capital Models Ch /29 Overview of the Labor Market Ch /24 Pre-Market Investments in HC Ch. 5 08/31 Practice Problems / Discussion 10/26 Post-Market Investments in HC Ch. 6 09/03 Labor Day No Classes 10/29 Signaling Notes 3 09/05 Indifference Curves I Ch /31 Practice Problems / Discussion 09/07 Indifference Curves II Ch. 4, PS1 due 11/02 MIDTERM EXAM No.2 09/10 Budget Constraints Ch. 4 11/05 Basics of Game Theory Notes, PS4 due 4 09/12 Equilibrium under the Labor-Leisure Model Ch /07 Efficiency Wages Ch. 7, 14 09/14 Practice Problems / Discussion 11/09 Tenure and Wages Ch /17 Reservation Wages Ch. 4 11/12 Veteran s Day No Classes 5 09/19 Welfare and Equilibrium Ch /14 Compensating Wage Differentials I Ch /21 Practice Problems / Discussion 11/16 Compensating Wage Differentials II Ch /24 Income and Substitution Effect Ch. 4 11/19 Compensating Wage Differentials III Ch /26 Household Supply Model I Ch. 29, PS2 due 14 11/21 Thanksgiving Break No Classes 09/28 Household Supply Model II Ch /23 Columbus Day Observed No Classes 10/01 MIDTERM EXAM No.1 11/26 Practice Problems / Discussion PS5 due 7 10/03 Exam Answers / Lifecycle and Labor Supply I Ch /28 Labor Market Discrimination I Ch /05 Lifecycle and Labor Supply II Ch /30 Labor Market Discrimination II Ch /08 Labor Demand I Ch /03 Review Session for Final Exam 8 10/10 Labor Demand II Ch /12 FINAL EXAM 10/12 Market Equilibrium I (Perfect Competition) Ch. 7, notes 10/15 Market Equilibrium II (Monopoly) Ch. 7, notes 9 10/17 Market Equilibrium III (Monopolistic Competition) Ch. 7, notes 10/19 Practice Problems / Discussion PS3 due 5

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