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ECON 4626-001 Economics of Inequality and Discrimination

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ECON 4626-001 Economics of Inequality and Discrimination
University of Colorado at Boulder
Department of Economics
Prof. Jeffrey S. Zax
[email protected]
303-492-8268
http://www.colorado.edu/Economics/Zax
Economics 4626
Tentative syllabus and schedule
4 January 2016
Welcome. I am Prof. Jeffrey S. Zax. This is Economics 4626, The Economics of Inequality and
Discrimination.
Course description:
The purpose of this course is to investigate the extent of inequality, its causes and its
consequences. This investigation occurs at both the macroeconomic and microeconomic
levels. At the macroeconomic level, we discuss the relationship between inequality and growth
and the effects of different national institutions on this relationship. At the microeconomic
level, we discuss inequality in multiple dimensions. We analyze the individual choices from
which and economic contexts in which it arises. We complete this discussion with an examination of discrimination: inequality which arises when disadvantages are imposed through
coercive denial of market opportunities.
This course requires previous completion of Economics 3070, Intermediate Microeconomic
Theory, or its equivalent. This prerequisite will be enforced. In addition, previous completion of
Economics 3080, Intermediate Macroeconomic Theory, or its equivalent, is helpful. Anyone
uncertain with regard to their preparation should consult with me immediately.
This course will meet on Tuesdays and Thursdays from 12:30 p.m. until 1:45 p.m. throughout
the semester in Economics 119. I will drop any student who is enrolled at the beginning of the
semester and who misses more than one of the first three classes, on 12, 14 and 19 January. I
will hold regular office hours between 2:00 p.m. and 4:00 p.m. on Tuesdays and between
2:00pm. and 3:00p.m. on Thursdays in Economics 111, my office. Appointments may be made
for meetings at other times, if these are inconvenient. Course information will be posted on
Desire2Learn, as needed.
Course requirements:
Performance in this course will be judged on the basis of five instruments. The first three
instruments are examinations. They will ordinarily consist of short essay questions addressing
the material in lectures and readings. They may also include short computational exercises.
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The final examination will take place on Sunday, 1 May, from 7:30 p.m. until 10:00p.m. It will
require the full 2.5 hours and be worth 150 points. Any student who has three or more final
examinations scheduled on 1 May has the right to reschedule all exams following the first two.
Any student wishing to invoke this right must do so by 18 March.1
Two midterm examinations will each take 40 minutes, and be worth 40 points. They will take
place on 9 February and 5 April unless class progress deviates significantly from expectations.
Two papers complete the course requirements. Each will analyze the issues presented in a case
from the Harvard Business School, based on discussions in class and the material in readings.
Both papers must be type-written, double-spaced, with conventional margins. Papers that
exceed the maximum lengths, either in physical length or because of compressed format, will
be penalized. These papers must be submitted electronically to the email address above in the
Adobe .pdf format. The computers in the computer lab in the basement of the Economics
Building can create .pdf files from Word files. Make sure that you arrange to convert your
papers to .pdf format before the deadline for submission. Speak with me in advance if you
anticipate difficulty with this requirement. Only .pdf files will be accepted.
The first term paper is a three-page discussion of Iinequality and Globalization, Harvard
Business School Case No. 9-705-040. It will be due on 23 February unless class progress
deviates significantly from expectations. It will be worth 20 points. The second paper is a fivepage discussion of Inequality and the American Model, Harvard Business School Case No.
9-703-025. It will be due on 19 April unless class progress deviates significantly from expectations. It will be worth 50 points. Both cases will be available at the UMC Book Store. They may
also be available on-line at the Harvard Business School.
Excuses for the five course requirements will be granted only under extraordinary circumstances. If granted, the excused points will be reallocated to subsequent requirements. The
course as a whole is valued at 300 points. The score attained by each student, evaluated
relative to those of other students and to the score which would be attained by an intelligent
student of economics at this level, will determine final letter grades.
The material to be mastered in this class is contained in the lectures and assigned readings.
Students who do not intend to attend all lectures should not enroll in this course. During
lectures, electronic devices such as laptops and cell phones may be used only for course
purposes. Improper use may be penalized by dismissal from the lecture, grade penalties or
both.
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University policies regarding multiple final examinations on the same day are
available at http://www.colorado.edu/policies/final-examination-policy.
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The tentative schedule of lectures below also includes the list of assigned readings. All articles
are from the Journal of Economic Perspectives. They are available as .pdf files through the
University Library’s website. From any University computer, follow this protocol:
1.
2.
3.
4.
5.
6.
Access the Library website at http://ucblibraries.colorado.edu/.
Click on “Title” in “search Chinook Classic”.
Enter “journal of economic perspectives” in the adjacent field.
Click on “Journal of Economic Perspectives (Online)”.
Click on “Full-text available from AEA”.
Locate the desired article.
Additional readings may be assigned at my discretion.
Tentative course schedule:
Date
Lecture
number Lecture title, readings and assignments
I. The Measurement of Inequality
12 January
1. Introduction
14 January
2. Simple inequality measures
Banerjee, Abhijit and Esther Duflo (2008) “What is middle class
about the middle classes around the world?”, Journal of Economic
Perspectives, Vol. 22, No. 2, Spring, 3-28.
19 January
3. Lorenz curves and Gini coefficients
II. The Macroeconomics of Distribution
21 January
4. The effects of growth on inequality
Autor, David (2015) “Why are there still so many jobs? The history
and future of workplace automation”, Journal of Economic
Perspectives, Vol. 29, No. 3, Summer, 3-30.
26 January
5. The effects of inequality on growth
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28 January
6. Institutions and inequality
Levine, Ross (2005) “Law, endowments and property rights”, Journal
of Economic Perspectives, Vol. 19, No. 3, Summer, 61-88.
Svensson, Jakob (2005) “Eight questions about corruption”, Journal
of Economic Perspectives, Vol. 19, No. 3, Summer, 19-42.
2 February
7. Intertemporal inequality
Easterlin, Richard A. (2000) “The worldwide standard of living since
1800”, Journal of Economic Perspectives, Vol. 14, No. 1, Winter, 7-26.
Lee, Ronald (2003) “The demographic transition: Three centuries of
fundamental change”, Journal of Economic Perspectives, Vol. 17, No.
4, Fall, 167-190.
4 February
8. Inter-country inequality
Pritchett, Lant (1997) “Divergence, big time”, Journal of Economic
Perspectives, Vol. 11, No. 3, Summer, 3-17.
9 February
First midterm examination
III. The Microeconomics of Distribution
11 February
9. Investments in human capital: Schooling, training, experience and
the value of life
Cullen, Julie Berry, Steven D. Levitt, Erin Robertson and Sally Sadoff
(2013) “What can be done to improve struggling high schools?”,
Journal of Economic Perspectives, Vol. 27, No. 2, Spring, 133-152.
16 February
10. Intragenerational mobility
18 February
11. The inheritance of economic status, intergenerational mobility and
redistributive policy
Corak, Miles (2013) “Income inequality, equality of opportunity, and
intergenerational mobility”, Journal of Economic Perspectives, Vol.
27, No. 3, Summer, 79-102.
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Solon, Gary (2002) “Cross-country differences in intergenerational
earnings mobility”, Journal of Economic Perspectives, Vol. 16, No. 3,
Summer, 59-66.
23 February
12. Local externalities, peer effects and inequality
Kremer, Michael and Dan Levy (2008) “Peer effects and alcohol use
among college students”, Journal of Economic Perspectives, Vol. 22,
No. 3, Summer, 189-206.
Essay on Inequality and Globalization, Harvard Business School Case
No. 9-705-040 is due.
25 February
13. Inequality as an incentive
1 March
14. Wealth inequality
Kopczuk, Wojciech (2015) “What do we know about the evolution of
top wealth shares in the United States”, Journal of Economic
Perspectives, Vol. 29, No. 1, Winter, 47-66.
3 March
15. Health inequality
Smith, James P. (1999) “Healthy bodies and thick wallets: The dual
relation between health and economic status”, Journal of Economic
Perspectives, Vol. 13, No. 2, Spring, 145-166.
Cutler, David M., Edward L. Glaeser and Jesse M. Shapiro (2003)
“Why have Americans become more obese?”, Journal of Economic
Perspectives, Vol. 17, No. 3, Summer, 93-118.
8 March
16. Income, earnings and wage inequality
Acemoglu, Daron and James A. Robinson (2015) “The rise and decline of the general laws of capitalism”, Journal of Economic
Perspectives, Vol. 29, No. 1, Winter, 3-28.
Piketty, Thomas and Emmanuel Saez (2007) “How progressive is the
U.S. federal tax system? A historical and international perspective”,
Journal of Economic Perspectives, Vol. 21, No. 1, Winter, 3-24.
10 March
17. Equivalence scales
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15 March
18. Consumption inequality
Jorgenson, Dale W. (1998) “Did we lose the war on poverty?”, Journal of Economic Perspectives, Vol. 12, No. 1, Winter, 79-96.
17 March
19. Poverty
Hoynes, Hilary W., Page, Marianne E. and Ann Huff, (2006) “Poverty
in America: Trends and explanations”, Journal of Economic Perspectives, Vol. 20, No. 1, Winter, 47-68.
Smeeding, Timothy (2006) “Poor people in rich nations: The United
States in comparative perspective”, Journal of Economic Perspectives, Vol. 20, No. 1, Winter, 69-90.
29 March
20. Children’s welfare
Duncan, Greg J. and Katherine Magnuson (2013) “Investing in
preschool programs”, Journal of Economic Perspectives, Vol. 27, No.
2, Spring, 109-132.
Edmonds, Eric V. and Nina Pavcnik (2005) “Child labor in the global
economy”, Journal of Economic Perspectives, Vol. 19, No. 1, Winter,
199-220.
31 March
21. Well-being
Kahneman, Daniel and Alan B. Krueger (2006) “Developments in the
measurement of subjective well-being”, Journal of Economic Perspectives, Vol. 20, No. 1, Winter, 3-24.
Deaton, Angus (2008) “Income, health, and well-being around the
world: Evidence from the Gallup poll”, Journal of Economic
Perspectives, Vol. 22, No. 2, Spring, 53-72.
5 April
Midterm examination
IV. Evaluating inequality
7 April
22. Social welfare functions and societal choice
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12 April
23. Preferences for redistribution and feasible redistribution
Diamond, Peter and Emmanuel Saez (2011) “The case for a progressive tax: From basic research to policy recommendations”, Journal of
Economic Perspectives, Vol. 25, No. 4, Fall, 165-190.
Bonica, Adam, Nolan McCarty, Keith T. Poole and Howard Rosenthal
(2013) “Why hasn’t democracy slowed rising inequality?”, Journal of
Economic Perspectives, Vol. 27, No. 3, Summer, 103-124.
V. Discrimination and anti-discrimination policies
14 April
24. Race, ethnicity and the economics of identity
19 April
25. The discriminatory instinct
Essay on Inequality and the American Model, Harvard Business
School Case No. 9-703-025, is due.
21 April
26. Discrimination in labor markets: Models, measurement and policy
Darity, William A. Jr. and Patrick L. Mason (1998) “Evidence on
discrimination in employment: Codes of color, codes of gender”,
Journal of Economic Perspectives, Vol. 12, No. 2, Spring, 63-90.
Blau, Francine D. and Lawrence M. Kahn (2000) “Gender differences
in pay”, Journal of Economic Perspectives, Vol. 14, No. 4, Fall, 25-46.
Heckman, James (1998) “ Detecting discrimination”, Journal of
Economic Perspectives, Vol. 12, No. 2, Spring, 101-116.
Fryer, Roland G. Jr. and Glenn C. Loury (2005) “Affirmative action
and its mythology”, Journal of Economic Perspectives, Vol. 19, No. 3,
Summer, 147-162.
26 April
27. Housing segregation and its progeny: School busing, Fair Housing
and environmental racism
Ladd, Helen F. (1998) “Evidence on discrimination in mortgage
lending”, Journal of Economic Perspectives, Vol. 12, No. 2, Spring,
41-62.
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28 April
28. Discrimination in automobile and other markets
Yinger, John (1998) “Evidence on discrimination in consumer markets”, Journal of Economic Perspectives, Vol. 12, No. 2, Spring, 2340.
1 May
Final examination 7:30p.m.-10:00p.m.
University policies:
The University adheres to the standards for student privacy rights and requirements as
stipulated in the Federal Rights and Privacy Act (FERPA) of 1974.2 Campus policy regarding
disabilities requires that faculty adhere to the recommendations of Disability Services. In
addition, campus policy regarding religious observances requires that faculty make every
effort to reasonably and fairly accommodate all students who, because of religious obligations,
have conflicts with scheduled examinations, assignments or required attendance. Any student
eligible for and needing academic adjustments or accommodations because of disability or
religious practice should arrange to meet with me immediately. Those with disabilities should
immediately submit a letter from Disability Services describing appropriate adjustments or
accommodations.3
Students and faculty share responsibility for maintaining an appropriate learning environment. All are subject to the University’s polices on Sexual Harassment and Amorous Relationships.4 Students who fail to adhere to appropriate behavioral standards may be subject to
discipline. Faculty have the professional responsibility to treat students with understanding,
dignity and respect, to guide classroom discussion and to set reasonable limits on the manner
2
A description is available at
http://www.colorado.edu/registrar/resources/family-educational-rights-and-privacy-act-ferpa.
3
University polices regarding religious practice are available at
http://www.colorado.edu/policies/observance-religious-holidays-and-absences-classes-andorexams. University policies regarding disabilities are available at
http://disabilityservices.colorado.edu. Disability Services can be contacted by telephone at
303-492-8671, or in person at Willard 322.
4
University policies regarding Sexual Harassment and Amorous Relationships are
available at http://www.colorado.edu/institutionalequity/policies. The Office of Institutional
Equity and Compliance can be reached by telephone at 303-492-2127 or at
http://www.colorado.edu/institutionalequity/. The Office of Student Conduct and Conflict
Resolution can be reached by telephone at 303-492-5550 or at http://www.colorado.edu/osc/.
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in which students express opinions.5 I am happy to discuss any issues of individual or group
treatment in office hours or by appointment.
All students of the University of Colorado at Boulder are responsible for knowing and adhering
to this institution’s policy regarding academic integrity. Cheating, plagiarism, fabrication,
lying, bribery, threatening behavior and assistance to acts of academic dishonesty are
examples of behaviors that violate this policy. Ordinarily, a student engaged in any act of
academic dishonest will receive a failing grade for the course. In addition, all incidents of
academic misconduct shall be reported to the Honor Code Office. Depending on its findings,
students who are found to be in violation of the academic integrity policy will be subject to
non-academic sanctions, including but not limited to university probation, suspension, or
expulsion.6
5
University policies regarding classroom behavior are available at
http://www.colorado.edu/policies/student-classroom-and-course-related-behavior
and at
http://www.colorado.edu/osc/sites/default/files/attached-files/studentconductcode_15-16.pdf.
6
The Honor Code Office website is at http://honorcode.colorado.edu/. The Honor Code
office can be contacted by email at [email protected] or by telephone at 303-735-2273.
Additional information regarding the Student Honor Code Policy is available at
http://www.colorado.edu/policies/student-honor-code-policy.
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