Unit convenor and teaching staff |
Unit convenor and teaching staff
Unit Convenor
Craig MacMillan
Contact via craig.macmillan@mq.edu.au
4ER 427
Consultation - Check iLearn
Tony Bryant
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Credit points |
Credit points
3
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Prerequisites |
Prerequisites
(15cp at 100 level or above) including (ECON110 or ECON111)
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Corequisites |
Corequisites
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Co-badged status |
Co-badged status
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Unit description |
Unit description
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.
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Information about important academic dates including deadlines for withdrawing from units are available at https://www.mq.edu.au/study/calendar-of-dates
On successful completion of this unit, you will be able to:
Name | Weighting | Hurdle | Due |
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Weekly Tutorial Worksheets | 40% | No | Weekly from week 3 |
Final Examination | 60% | No | University Examination Period |
Due: Weekly from week 3
Weighting: 40%
Tutorials start in week 2. However, from week 3, the class will work through a series of tutorial worksheets. The worksheet questions will typically be based on previous lectures and associated readings and will attempt to reinforce that material as well as set students up to better understand the material on which it will build in subsequent lectures. All of these worksheets need to be submitted by 11.59 pm of the Friday after the tutorial in which they were discussed. The submission occurs via Turnitin on the ECON244 iLearn page. We will work as a group through the questions in the tutorial, but it is up to each student to submit their own individual worksheet.
Please note that no extensions will be granted. Late assignments will be accepted up to 96 hours after the submission deadline. There will be a deduction of 20% of the total available marks made from the total awarded mark for each 24 hour period or part thereof that the submission is late (for example, 25 hours late means a 40% penalty). The only exception are those students who experience illness or misadventure in relation to this task, they can apply for special consideration and if approved may be expected to undertake another assessment task.
Note that there will not be a worksheet due (i) in week 9 because of the public holiday on Monday, 7 October and (ii) in week 13 as this tutorial will be devoted to a wrap-up and revision session.
Students are required to submit all NINE of the worksheets, but only FOUR will be chosen to be marked. These will be worth ten marks each and so contribute 40% of the overall assessment in the unit. The four to be marked will be chosen randomly.
More detail about the worksheets will be provided in the first tutorial in week 2 and via iLearn.
Due: University Examination Period
Weighting: 60%
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 special consideration 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
Recommended Text
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.
Additional References
Productivity Commission (2015) Workplace Relations Framework, Final Report Volumes 1 & 2, Canberra. This is a very useful report because it situates the Australian labour market in its broader institutional and cultural context. Available as a free download from:
https://www.pc.gov.au/inquiries/completed/workplace-relations/report
Other references will be listed on the lecture slides on a weekly basis and where possible will be provided on the iLearn unit website or in econ244 e-reserve folder .
Technology Used and Required
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.
Weeks |
Lecture Topics & Key Dates |
1 |
LECTURE 1: 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. Readings: Kaufman & Hotchkiss (hereafter K & H) Ch.1 Garvey, G. T. (1994) “Why labour is not different?” Agenda, 1(1), pp 5-12 Productivity Commission (2015) Workplace Relations Framework, Final Report Volume 1, Chapter 1 & 2 and Appendix H. |
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 evidence on the Australian labour supply, inn particular the issue of penalty rates will be looked at.. Readings: K&H Ch.2 pp 44-62 and pp71-94. & Ch.3 pp114-150 and pp156-158 Productivity Commission (2015) Workplace Relations Framework, Final Report, Chapters 9 - 15 & Appendix F. Norris et al Ch 2, optional reading |
4 & 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 (i) the hypothesis that labour demand has become polarised, with growth occurring mainly at the top and bottom of the skill distribution and (ii) casual employment and gig/platform work. Readings: 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
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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. Finally, internships are examined in terms of whether they increase the employability of workers. Readings: K&H Ch.7 pp326-340 and pp351-368 Norris et al Ch 4 optional reading |
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Mid session break - goes from 16 August to 27 August 2019
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8 |
LECTURE 8: THE DETERMINATION OF WAGES AND THE ECONOMICS OF THE MINIMUM WAGE. Examination will be made of the wage determination under perfect competition. The rationale and economic consequences of government determined minimum wages will also be explored. Finally, the different methods of setting pay in Australia will be examined. References: K & H Ch 6 pp260-294. Productivity Commission (2015) Workplace Relations Framework, Final Report, Chapters 4-7 and Appendices C, D & E. 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]
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9 &10 |
LECTURE 9: There is no lecture or tutorial in week 9 due to the Labour Day Public Holiday on 7 October 2019 LECTURE 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. 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. |
11 |
LECTURE 11: TRADE UNIONS This topic look examines different theories of trade union membership and behaviour, union membership and density, collective bargaining, industrial disputes and union wage effects. K&H Ch 11 & 12 Productivity Commission (2015) Workplace Relations Framework, Final Report Volume 1, Chapter 20. Pennington, A. (2018) On the Brink: The Erosion of Enterprise Agreement Coverage in Australia’s Private Sector. Sydney: Centre for Future Work |
12 |
LECTURE 12: 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. References: K & H Ch 8 pp387-418 and pp431-434 |
13 |
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. Readings: 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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