Labor Economics for Master/ Diplom

NEW: The exam review takes place 10. November at 11-12 a.m. in the chair's library in room 2312.

• Instructor: Prof. Bernd Fitzenberger, Ph.D.
   
• Lecture: Tuesday 8:30 -10:00, HS 1015
   
• Exercise Session: Wednesday 8:30 -10:00, HS 1016
  The exercise session is held by Katrin Sommerfeld.
   
• Credits: Lecture (2 SWS) plus exercise session (2 SWS) gives 6 credits
   
• Language: The course is taught in English.
   
• Participants: Approximately 40. The course is open to Diploma and IMP students.
   

• Prerequisites: Microeconomics, Macroeconomics, Econometrics
   

• Exam: Wednesday, 10. August, 8-10 a.m., room 1010.
  Repetition: Friday, 14. October, 13-15h, room 2004.

Summary

Wages, employment, and education are key aspects for the well being of most individuals in an economy and labor market policy is an important part of economic policy. A high and persistent level of unemployment is one of the major policy problems in Germany. This course provides an overview on the economic analysis of labor markets. The main parts of the course are static and dynamic theories of labor supply, labor demand, investment into human capital,union theories and wage bargaining, effciency wages, unemployment, as well as issues in personnel economics. The course will be both theoretical and empirical. A number of current policy issues will be discussed as case studies such as 'welfare to work policies', 'reducing taxes and social contributions based on labor income', 'early retirement' etc. The exercise session involves working on the solutions of problem sets and discussing current research papers.
 

Participants are expected to read the paper by J. Möller (2010) before the first lecture, see
http://www.springerlink.com/content/60x1512tpr61m03p/fulltext.pdf

Background: New York Times column by Paul Krugman (12. Nov. 2009)

Outline

1. Introduction
   Case Study: Overview on the labor market in Germany and its response to the recent recession
2. Labor Supply
   Case Study: Welfare to work policies
3. Human Capital and Signalling
4. Labor Demand
   Case Study 1: Minimum Wages in Germany
   Case Study 2: Are Temporary Help Jobs Stepping Stones or Dead Ends?
5. Unemployment, Search and Matching Theory
6. Unions and Wage Bargaining
   Case Study: Has the decline in collective bargaining contributed to the increase in wage inequality in Germany?
7. Personnel Economics: Incentive Wages, Effciency Wages, Seniority Wages

Main References

• Borjas, G. J. (2010) Labor Economics, 5th edition, McGraw-Hill, Boston.
• Franz, W. (2009) Arbeitsmarktökonomik, 7th edition, Springer Verlag, Heidelberg.

Further References

• Ashenfelter, O. und Card, D. (1999) Handbook of Labor Economics, Volume 3A-3C, Elsevier Science, Amsterdam.
• Ehrenberg, R. G. and R. S. Smith (2009) Modern Labor Economics: Theory and Public Policy, 10th edition, Pearson.
• Kaufman, B. E. and J. L. Hotchkiss (2003) The Economics of Labor Markets, 6th edition, Dryden Press, Fort Worth.
• Lazear, E. P. (1998) Personnel Economics for Managers, Wiley, New York.
• OECD (2010) Employment Outlook, July, Paris.
• Möller, J. (2010) The German labor market response in the world recession - de-mystifying a miracle. Zeitschrift für ArbeitsmarktForschung, 42(4), pp. 325-336.

Additional references will be made available during the course.

Course Materials

There is a course reader containing the slides used in the course and additional material. The reader is now available at the bookshop Walthari (Bertoldstraße 28) for 7,90 €. Make sure to buy the course reader for Master/ Diplom and not the one for Bachelor students!

Downloads

• Arbeitsmarktdaten 2011 kurz, lang
• Labor Market Facts 2011 short, long
• Follow-up to the question in class: Employment rates in East and West Germany:
  Graph, Source: Jansen, Kümmerling, Lehndorf (2009) IAQ-Report 2009-03 p. 5
  Table, Source: Cornelißen (2005) Gender-Datenreport des BMFSFJ p. 109
• Please obtain the figures and tables from textbook used in the course. For this purpose there is a master copy available from the secretariat (room 2309). Note that figure 3.3 from the Franz (2009)  textbook was missing in the old version of the list of figures and tables. Moreover, figure 4.1 and table 9.3 from Franz (2006) were previoiusly missing. You can obtain the missing materials from the secretary.
• Old exams: 2007: first and second exam; 2009: first and second exam.
• Exam August 2011 here.
  
  
   

Exercise Session

• May 4th: No exercise session
• May 13th: Questions on Möller Paper
• May 18th: Problem Set 1
• May 25th: Problem Set 1
• June 1st: Paper reading: Caliendo, Wrohlich (2010) Evaluating the German 'Mini-Job' reform using a natural experiment. Applied Economics, 42, pp. 2475-2489. Questions on the paper.
• June 8th: Paper reading continued
• June 15th: Break
• June 22nd: Problem Set 2
• June 29th: Problem Set 2 finished and start next paper discussion:
  Card, D. (1993) Using Geographic Variation in College Proximity to Estimate the Return to Schooling, NBER Working Paper No. 4483.
  Published in: L.N. Christofides, E.K. Grant, R. Swidinsky (Editors) Aspects of
  Labor Market Behaviour: Essays in Honour of John Vanderkamp. Toronto: University of Toronto Press, 1995.
  Questions on the paper.
• July 6th: Paper reading continued and start of Problem Set 3.
• July 13th: Problem Set 3
• July 20th: Paper reading: Spitz-Oener (2006) Technical Change, Job Tasks, and Rising Educational Demands: Looking outside the Wage Structure. Journal of Labor Economics, Vol. 24 (2). Questions on the paper.
• July 27th: Problem Set 4
• August 3rd: Paper reading: Burda, Hunt (2011) What Explains the German Labor Market Miracle in the Great Recession?
  IZA Discussion Paper No. 5800.
  Questions on the paper
  Outline of reasons given in this paper

Anrechenbarkeit im Diplomstudiengang VWL

• Theoretische VWL (Makroökonomie und Außenwirtschaft)
• Arbeit und Personal
• Empirische Wirtschaftsforschung und Ökonometrie und
• Sozialpolitik