ECON 8676-001 Seminar: Labor Economics 1

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ECON 8676-001 Seminar: Labor Economics 1
Terra McKinnish
Econ 115
[email protected]
Economics 8686- Labor Economics 2
Spring 2004
This is a graduate survey course in labor economics. We will be covering classic
topics in labor supply, human capital, and economics of the family. Attached is the
reading list that we will be covering this semester. We will read and discuss in detail
only a subset of the articles listed. I encourage students to download reading lists for
similar labor courses taught at other universities, because they act as excellent lists of
references on various labor topics. In particular, I recommend obtaining the syllabus of:
1) V. Joseph Hotz, UCLA, http://www.econ.ucla.edu/hotz/e261a/
2) Robert Moffitt, Johns Hopkins,
Both of the above instructors have compiled extensive reading lists.
During the first 3 weeks of this course I will be covering the basic topics of static
labor supply theory and estimation. After that, class time will be spent discussing
individual papers from the reading list. Students should plan on presenting 2 papers from
the reading list during the course of the semester. Homeworks will contain problem sets
and/or data exercises to give students additional hands-on experience with the material
being covered.
The requirements of this course are:
a) Midterm and Final (25% and 35%)
b) 2 homeworks (15%)
c) 2 paper presentations (25%)
Reading List
Labor Supply
A. Static Model
Deaton, A. And J. Muellbauer. Economics and Consumer Behavior. p.86-105 and
Killingsworth, M. Labor Supply. 1983. Chapters 1 and 2.
Pencavel, J. “Labor Supply of Men: A Survey.” Handbook of Labor Economics. Vol. I,
Killingsworth and Heckman. “Labor Supply of Women” Handbook of Labor Economics,
Vol. I, 1986.
B. Estimation of the Static Model
Killingsworth, M. Labor Supply. 1983. Chapters 3 and 4.
Maddala. Limited Dependent and Qualitative Variables in Econometrics. 1983. Various
Blundell and MaCurdy, “Labor Supply: A Review of Alternative Approaches” Handbook
of Labor Economics, Vol. III
Heckman, J. “Sample Selection Bias as a Specification Error.” Econometrica. 1979.
Cogan, J. “Fixed Costs and Labor Supply.” Econometrica. 1981.
Mroz, T. “The Sensitivity of an Empirical Model of Married Women’s Hours of Work to
Economic and Statistical Assumptions.” Econometrica. 1987.
C. Empirical Studies on Non-Linear Budget Sets
C.1 Taxes
Moffitt. “The Econometrics of Kinked Budget Constraints.” Journal of Economic
Perspectives 1990. or “The Econometrics of Piecewise-Linear Budget
Constraints” Journal of Business and Economic Statistics, July 1986.
Burtless and Hausman. “ The Effect of Taxation on Labor Supply. “ Journal of
Political Economy. 1978.
Blomquist, S., “The Effect of Income Taxation on the Labor Supply of Married Men
in Sweden.” Journal of Public Economics. 1983.
MaCurdy, Green and Paarsch. “Assessing Empirical Approaches for Analyzing Taxes
and Labor Supply.” Journal of Human Resources. 1990.
Eissa, Nada. “Taxation and Labor Supply of Married Women: The Tax Reform Act of
1986 as a Natural Experiment” NBER Working Paper #W5023, 1995.
C.2 Transfer Programs
Moffitt, R. “Incentive Effects of the U.S. Welfare System: A Review.“ Journal of
Economic Literature. 1991.
Moffitt and Wolfe. “The Effect of the Medicaid Program on Welfare Participation and
Labor Supply,” Review of Economics and Statistics. 1992.
Hoynes, H. “Welfare Transfers in 2-Parent Families: Labor Supply and Welfare
Participation under AFDC-UP” Econometrica. 1996.
Eissa and Hoynes. “The Earned Income Tax Credit and the Labor Supply of Married
Couples.” NBER Working Paper #W6856, 1998.
Yellowitz. “The Medicaid Notch, Labor Supply and Welfare Participation: Evidence
from Eligibility Expansions.” QJE 1995.
Bruce Meyer and Dan Rosenbaum. "Welfare, the Earned Income Tax Credit, and the
Labor Supply of Single Mothers" QJE 2001.
C.3 Child Care
Heckman. “The Effects of Child Care Programs on Woman’s Work Effort.” JPE. 1974.
Berger and Black. “Child Care Subsidies, Quality of Care and the Labor Supply of
Low-Income Single Mothers.” Review of Economics and Statistics. 1992.
Ribar. “Child Care and the Labor Supply of Married Women.” JHR 1992.
Gelbach, Jonah. “How Large an Effect Do Child Care Costs Have on Single Mothers’
Labor Supply? Evidence Using Access to Free Public Schooling.” AER 2002.
D. Life-Cycle Models of Labor Supply
Deaton, A. And J. Muellbauer. Economics and Consumer Behavior. p.309-323.
Killingsworth, M. Labor Supply. 1983. Chapter 5.
MaCurdy. “An Empirical Model of Labor Supply in a Life-Cycle Setting.” JPE 1981.
Heckman and MaCurdy. “ A Life-Cycle Model of Female Labor Supply.” Review of
Economic Studies. 1980.
Browning, Deaton and Irish. “A Profitable Approach to Labor Supply and Commodity
Demand over the Life-Cycle” Econometrica 1985.
Altonji, Joseph. “Intertemporal Substitution in Labor Supply: Evidence from Micro
Data.” JPE, June 1986.
Camerer, Babcock, Lowenstein and Thaler. “Labor Supply of NYC Taxi Cabdrivers:
One Day at a Time.” QJE 1997
Human Capital
A. Basic Model
Becker. Human Capital. 1962. Chapter 2.
Mincer. Schooling, Experience and Earnings. 1974. Chapters 1-2.
Willis, R. “Wage Determinants: A Survey and Reinterpretation of Human Capital
Earnings Functions.” Handbook of Labor Economics, Vol. 1. 1986.
Murphy and Welch. “Empirical Age-Earnings Profiles.” JOLE. 1990.
B. The Returns to Schooling
B.1 Empirical Evidence
Card. “The Causal Effect of Education on Earnings.” Handbook of Labor Economics.
Vol 3.
Griliches. “Estimating the Returns to Schooling. Some Econometric Problems.”
Econometrica 1977.
Griliches. “Sibling Models and Data in Economics: Beginnings of a Survey.” JPE
Willis and Rosen. “Education and Self-Selection.” JPE 1979.
Angrist and Krueger. ”Does Compulsory Schooling Attendance Affect Schooling and
Earnings?” QJE 1991.
Altonji. “The Demand for and Return to Education when Educational Outcomes are
Uncertain.” JOLE 93.
Ashenfelter and Krueger. “Estimates of the Economic Return to Schooling from a New
Sample of Twins.” AER 1994.
B.2 Some Important Methodological Comments
Bound and Krueger. “The Extent of Measurement Error in Longitudinal Earnings Data:
Do Two Wrongs Make a Right?” JOLE 1991.
Bound, Jaeger and Baker. “Problems with Instrumental Variables Estimation when the
Correlation between the Instruments and the Endogenous Explanatory Variable
is Weak.” JASA 1995.
Bound and Solon. “Double Trouble: On the Value of Twins-Based Estimation of the
Returns to Schooling.” NBER Working Paper #6721. 1998.
C. Returns to School Quality
Card and Krueger. “School Quality and Black-White Relative Earnings: A Direct
Assessment.” QJE 1992.
Card and Krueger. “Does School Quality Matter? Returns to Education and the
Characteristics of Public Schools in the United States.” JPE 1992.
Heckman, Layne-Farrar and Todd. “Human Capital Pricing Equations with an
Application to Estimating the Effect of Schooling Quality on Earnings.”
Review of Economics and Statistics. 1996.
Krueger, Alan and Stacy Dale. “Estimating the Payoff to Attending a More Selective
College: An Application of Selection on Observables and Unobservables.”
Princeton Working Paper, 1998.
Black, Dan, Kermit Daniel and Jeffrey Smith. “College Quality and the Wages of Young
Men.” Working Paper, 2000.
D. Returns to Training Programs
LaLonde. “Evaluating the Econometric Evaluations of Training Programs with
Experimental Data.” AER 86.
Heckman and Hotz. “Choosing Among Alternative Experimental Methods for
Estimatingthe Impact of Social Programs: The Case of Manpower Training.”
JASA 1989.
Heckman, James, Robert LaLonde, and Jeffrey Smith. "The Economics and
Econometrics of Active Labor Market Programs" Handbook of Labor
Economics, Vol. III.
E. Life-Cycle Models of Human Capital Investment
Ben Porath. “The Production of Human Capital and the Life Cycle of Earnings.” JPE.
Heckman. “A Life-Cycle Model of Earnings, Learning and Consumption.” JPE 1976.
Economics of the Family
A. Household Production
Becker, Gary. “A Theory of the Allocation of Time.” Economic Journal. 1965.
(or first 2 chapters of A Treatise on the Family, 1981)
Gronau, Reuben. “Home Production: A Survey.” Handbook of Labor Econonomics.
Juster and Stafford. “The Allocation of Time: Empirical Findings, Behavioral Models
and Problems of Measurement.” Journal of Economics Literature. 1991.
B. Marriage and Childbearing, Theory
Montgomery and Trussell. “Models of Marital Status and Childbearing.” Handbook of
Labor Economics. 1986.
Becker, A Treatise on the Family, 1981 Ch. 4-5
Hotz, Klerman and Willis. “The Economics of Fertility in Developed Countries.”
Handbook of Population Economics. 1997
Mcelroy, Marjorie and Horney, Mary Jean. “Nash-Bargained Household Decisions:
Toward A Generalization of the Theory of Demand.” IER 1981
Chiappori, Pierre-Andre. “Collective Labor Supply and Welfare.” JPE 1992
C. Marriage and Childbearing, Empirical Evidence
Schultz, Paul T. “Changing World Prices, Women’s Wages, and the Fertility
Transition: Sweden, 1860-1910.” Journal of Political Economy. 1985.
Johnson and Skinner. “Labor Supply and Marital Separation.” AER. 1986.
Hotz and Miller. “An Empirical Analysis of Life-Cycle Fertility and Female Labor
Supply.” Econometrica. 1988.
T. Paul Schultz. “Testing the neoclassical model of family labor supply and fertility.”
JHR 1990.
Angrist and Evans. “Children and Their Parents’ Labor Supply: Evidence from
Exogenous Variation in Family Size.” AER. 1998.
Jacobson, Pearce and Rosenbloom. “The Effects of Child-Bearing on Married Women’s
Labor Supply and Earnings. “ JHR, 1999.
Gray, Jeffrey S. 1998 "Divorce-Law Changes, Household Bargaining, and
Married Women's Labor Supply, " AER 88(3):628-42. 1998.
Lunberg, Shelly and Elaina Rose. "The Effects of Sons and Daughters on Men's Labor
Supply and Wages" Working Paper, 1999.
Brien, Michael, Stacy Dickert-Conlin and David Weaver. “Remarriage and Economic
Incentives in Social Security Widow Benefits.” forthcoming JHR
Bronars and Grogger. “The Economic Consequences of Unwed Motherhood: Using
Twins as a Natural Experiment.” AER. 1994.
Hotz, McElroy and Sanders. “The Effect of Teenage Childbearing on Maternal
Outcomes.” Working Paper 1998.
Akerlof, Yellen and Katz. “An Analysis of Out-of-Wedlock Childbearing in the
United States.” QJE. 1996.
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