Labour, unemployment and Politics [ LECON2051 ]

 Despite its introductory level, this course assumes a certain number of prerequisites in microeconomic theory (the theory of the firm, the demand for factors; the microeconomic theory of the consumer/worker) and in macroeconomics (wage formation at the aggregate level; analysis of the causes of unemployment).

• Choice of labour input by firms and choice of labour supply by the population.
• Perfect and imperfect competition on the labour market.
• Imperfect information on the labour market.
• Discrimination.
• Role of labour market institutions (labour law, unions, minimum wages, etc.).
• Analysis of performances on the labour market, with an emphasis on unemployment and the effectiveness of employment policies.

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• To acquire a basic knowledge of statistical concepts, so as to be able to understand correctly a descriptive analysis of labour markets.
• Becoming able to analyze real problems and interpret (stylized) facts related to labour issues through (i) reasoning and arguments rooted in a suited theoretical framework and (ii) producing a correct interpretation of relevant results coming from an empirical analysis.
• Becoming aware of the limitations of the available basic theories in labour economics.
• Concerning employment policies, to develop an understanding of their rationale and their role according to theory as well as a comprehension of the empirical evidence about the effects of these policies.

The course material of the lectures will be evaluated on the basis of a written closed-bookexam and of the quality of work done individually and in small groups.

The teaching methods are threefold. First, there are the lectures. Second, a good understanding of the content of this course requires the solving of exercises at home or in class. Third, the material covered in class is complemented by homework readings and/or group activities.

Participation of students is encouraged in the classroom through questions, exercises and discussions over subjects of topical interest.

The course covers the following topics:

1. What labour economics is about and what are the major methodological approaches? What are the basic statistical concepts? 2. Labour demand. 3. Labour supply (participation and working time, job-search). 4. Perfect competition. 5. Discrimination. 6. Collective bargaining. 7. Unemployment. 8. Labour market flows, matching and unemployment.

Slides and lecture notes are made available. The course is based on the following textbooks: Cahuc and Zylberberg (2004) Labor Economics, MIT Press and Borjas G. (2005) Labor Economics, Mc Graw-Hill, 3rd ed.