|Unit convenor and teaching staff||
Unit convenor and teaching staff
Contact via firstname.lastname@example.org
Available on iLearn
(15cp at 100 level or above) including (ECON110 or ECON111)
This is a unit in the economics of the labour market. It deals with some of the most fascinating and practical questions in economics; questions such as the following. How do firms use their remuneration systems to motivate their employees to work hard? When and why do employers and employees want a 'long-term relationship'? What are deferred compensation systems? What are internal labour markets and why do some firms run them? Why do some firms structure executive salaries to mimic the monetary payoff structure of a sporting tournament? Is investing in a university degree a good idea? Why do firms invest in training their employees? Who ultimately pays for this investment; the employer or the employee? How can asymmetric information lead to discrimination in the labour market? How would we measure such discrimination? Has the demand for labour in recent years resulted in job polarisation; that is, in the creation of 'lovely' jobs and 'lousy' jobs? This unit explores these issues and much more.
Information about important academic dates including deadlines for withdrawing from units are available at http://students.mq.edu.au/student_admin/enrolmentguide/academicdates/
|Within Session Class Test||5%||Week 5|
|Final Examination||60%||No||University Examination Period|
Students are expected to actively participate in tutorial discussion. To facilitate this all students are given 15 marks at the outset of the session. To keep these 15 marks you must do the following things. Firstly, attend all tutorials. Starting with tutorial one, each tutorial missed will result in the loss of one and a half marks. Secondly, in addition to attendance at tutorials students will be rewarded for active participation. Each week students will be randomly selected to help answer preset tutorial questions. Over the course of the tutorial program each student will be asked to help answer a question on three occasions. Each time a student fails to provide a satisfactory answer five marks will be deducted from the 15. If you are called upon to answer a question and are not present, you will lose 5 marks. In sum if you attend all tutorials and provide three satisfactory answers you keep all 15 marks. The tutorial questions will be made available on iLearn the week before they are to be discussed in the tutorial. If documented illness or unavoidable disruption results in missed tutorials students may make an application under the Disruption to Studies policy. If that application is successful you will not suffer a penalty for the missed tutorial.
Due: Week 5
This multiple choice class test will be held in week 5, on Thursday August 31, during your normal tutorial time and at your normal tutorial location. The test involves 10 multiple choice questions that are drawn from all material covered in the unit up to and including week 4. Students are awarded one mark for each correct answer and zero for each incorrect answer. If you miss this class test due to documented illness or unavoidable disruption you may make an application under the university Disruption to Studies policy. If you find yourself in this position contact Michael Dobbie immediately. If the application under Disruption to Studies is successful you will be required to sit a supplementary class test. This supplementary class test will be held on Thursday September 7.
Due: Week 10
Each student is required to submit a 1500 word essay on Tuesday October 17 2017 by 2pm. The essay is submitted via Turnitin. A separate document with the essay question and instructions will be available on iLearn by week 5. No extensions will be granted. Late essays will be accepted up to 72 hours after the submission deadline. There will be a deduction of 10% of the total available marks made from the total awarded for each 24 hour period or part thereof that the submission is late (for example 25 hours late will involve a 20% penalty). This penalty does not apply for cases in which an application is made under the university Disruption to Studies policy, and where that application results in a formal extension of the deadline. You need to submit the late essay via Turnitin.
Due: University Examination Period
An end of unit two hour examination held during the end of year examination period. The exam will cover all aspects of the unit material. It will involve answering three essay type questions that will give you the chance to demonstrate your knowledge of the economic concepts and labour market applications covered during the session. If you cannot make the final exam due to documented illness or unavoidable disruption you may make an application under the university Disruption to Studies policy. If this application succeeds you may be granted a Supplementary Exam that will be held in late December.
There will be one two-hour lecture each week, beginning in week one. There will be a one-hour tutorial each week, beginning in week two.
The timetable for classes can be found on the university web site at: http://www.timetables.mq.edu.au
The unit is based on the following textbook:
Kaufman, Bruce & Hotchkiss, Julie (2006) (7th ed) The Economics of Labor Markets, Mason (OH): South-Western (Thomson Learning).
Students DO NOT need to purchase this textbook. The sections from the textbook that are used in the unit are available to students via the econ244 e-reserve folder.
The following books are sometimes referred to in the lectures and tutorials. Many of these books also offer an alternative presentation of the material covered in the unit. Students may wish to consult these books for assistance in understanding the lecture material.
Norris, K., Kelly, R. and Giles, M. (2005) (6th ed) The Economics of Australian Labour Markets. Pearson, Australia.
Whitfield, K. & Ross, R. (1996) (2nd ed), The Australian Labour Market. Harper Educational, Australia.
Ehrenberg , R.G. & Smith, R.S. (1994)(5th ed). Modern Labor Economics Theory and Policy. HarperCollins College Publishers, New York.
Elliott, R. (1991), Labor Economics: A Comparative Text. McGraw Hill, London.
Lazear, E. (1998) Personnel Economics for Managers. Wiley, New York.
McConnell, C., Brue, S.L. & Macpherson, D. (1999) Contemporary Labor Economics. McGraw Hill, New York.
These books are available in the Reserve section of the library.
Unit Web Page
The web page for this unit can be accessed via ilearn.mq.edu.au. You should check this web page regularly. The lecture slides for each weeks lecture will be posted on the web page, before the lecture. You will find it useful to download the slides prior to the lecture, and bring to them to the lecture. We also use the web page to post important notices from time to time.
This unit is taught as a mix of tutorials and lectures. The lectures are designed to provide the tools which can then be applied in tutorials.
Lecture Topics & Key Dates
INTRODUCTION TO THE STUDY OF LABOUR MARKETS
Topics covered include; what is modern labour economics, schools of thought in labour economics, is labour fundamentally different from other commodities, labour market processes and labour market outcomes.
Kaufman & Hotchkiss (hereafter K & H) Ch.1
Garvey, G. T. (1994) “Why labour is not different?” Agenda, 1(1), pp 5-12
2 & 3
Tutorials begin in week 2 (relax, your tutor will lead the first tutorial)
LECTURES 2 & 3:
LABOUR SUPPLY IN THE SHORT-RUN
Topics covered include; the neoclassical theory of short-run labour supply, applications and criticisms of the theory and a look at some evidence on the Australian labour supply.
K&H Ch.2 pp 44-62 and pp71-94. & Ch.3 pp114-150 and pp156-158
Norris et al Ch 2, optional reading
4 & 5
WITHIN SESSION MULTIPLE CHOICE CLASS TEST HELD IN NORMAL TUTORIAL TIME WEEK 5
LECTURES 4 & 5:
LABOUR DEMAND: SHORT RUN & LONG RUN
This topic presents and critically evaluates the neoclassical theory of labour demand in the short-run and long-run. Modified models of labour demand are also considered. The lecture also examines the hypothesis that labour demand has become polarised, with growth occurring mainly at the top and bottom of the skill distribution.
K&H Ch.4 pp172-204 & Ch.5 pp217-244
Goos, M, Manning, A, and Salomons, A. (2009), 'Job Polarisation in Europe', American Economic Review: Papers and Proceedings, 99(2), pp58-63.
Norris et al Ch 3 optional reading
6 & 7
LECTURES 6 & 7
HUMAN CAPITAL THEORY AND THE QUALITATIVE DIMENSION OF LABOUR SUPPLY
This topic looks at the human capital account of investment in education and on-the-job training. It also explores the education/earnings relationship from both an empirical and theoretical perspective.
K&H Ch.7 pp326-340 and pp351-368
Norris et al Ch 4 optional reading
Mid session break
THE DETERMINATION OF WAGES UNDER PERFECT COMPETITION. THE ECONOMICS OF THE MINIMUM WAGE.
Examination will be made of the wage determination under competition. The rationale and economic consequences of government determined minimum wages will also be explored.
K & H Ch 6 pp260-294.
Dowrick, S. and Quiggin, J. (2003), A survey of the literature on minimum wages, February 2003 [http://ecocomm.anu.edu.au/people/info/dowrick/Minimum-Wage.pdf]
9 & 10
Compulsory essay due week 10, Tuesday October 17, 2pm, via Turnitin.
LECTURES 9 & 10:
EMPLOYEE MOTIVATION AND COMPENSATION. COMPENSATION IN EXECUTIVE LABOUR MARKETS (THE THEORY OF TOURNAMENTS)
This topic looks at issues surrounding the control of worker effort via payment schemes and other mechanisms. More specifically, piece rates versus time rates, and the theory of deferred-payment schemes. These lectures also examine compensation in executive labour markets via Tournament Theory. Empirical evidence in relation to all these issues is discussed.
Readings: ** these references, and the detailed lecture slides, are the references you need to read for this topic. The others are purely optional and are included for the benefit of students who would like to go more deeply into this topic.
**K&H Ch 10 pp505-511, pp530-534, pp552-555. Ch 7 pp367-368.
Norris et al pp 102-103.
Paul Milgrom & John Roberts (1992) Economics, Organization and Management. Englewood Cliffs: Prentice Hall. Ch.12 &13.
Ehrenberg & Smith Ch.11
Lazear, E. P. (1998) Personnel Economics for Managers. New York: Wiley. Chs 5, 9 & 11
Lazear, E. P (1999) “Personnel Economics: Past Lessons and Future Directions”, Journal of Labor Economics, 17(2), 199-236.
Lazear, E. P (2000a) “The Future of Personnel Economics”, Economic Journal, 110(Nov.), F611-639.
Lazear, E. P (2000b) “Performance Pay and Productivity”, American Economic Review, 90(5),1346-61.
Chang, C & Miller, P (1996) “Incentive Effects in the Australian Labour Market: An Application of the Lazear and Moore Model”, Australian Economic Papers, (June), 114-127.
Lazear, E. P. & Moore, R. L. (1984) “Incentives, Productivity and Labor Contracts”, Quarterly Journal of Economics, (May), 275-296.
Hutchens, R. (1987) “A Test of Lazear‟s Theory of Delayed Payment Contracts”, Journal of Labor Economics, 5(4, part2), S153-S170.
OCCUPATIONAL WAGE DIFFERENTIALS: THEORY, APPLICATIONS AND EVIDENCE
The classical and hedonic theories of compensating wage differentials will be presented and assessed. The hedonic theory will be applied to an examination of issues such as occupational health and safety, the growth of fringe benefits and the work/family-life balance debate. The lecture will also examine and appraise the empirical evidence relating to compensating wage differentials.
K & H Ch 8 pp387-418 and pp431-434
This lecture examines the theory and evidence in relation to trade unions. Topics include: models of trade unions including the monopoly union model, the 'right to manage' model, the efficient bargaining model and the 'exit-voice' model. The lecture also examines some of the evidence in relation to the effect of unions on wages and productivity.
K & H Ch 11, pp 558-576 and pp. 616-625. Ch 12.
DISCRIMINATION IN THE LABOUR MARKET
This lecture examines the causes and consequences of discrimination in the labour market. The measurement of discrimination in wages is outlined, as are recent trends in gender based wage discrimination.
K & H Ch.9 pp447-450, pp461-480
Norris et al Ch 7, optional reading
Smith, S. (1994), Labour Economics, Routledge, Chapter 5.
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