1

Econ 332
Economic Analysis of Labor Markets
Case Western Reserve University
Fall 2014










In this course we examine labor as a commodity that can be produced and traded. We
will apply economic concepts you learned in Principles of Microeconomics (the pre-
requisite for this course), such as supply and demand, market failures, opportunity cost, and how incentives affect decision-
making. Labor economics is concerned with how employees and employers behave and make decisions in response to
incentives such as wages, prices, profits, and non-price aspects like health insurance, vacation time, or even bring your dog
to work day. All of these incentives affect the optimal behavior of employees and employers. We also will examine other
players in the market for labor, such as the government and labor unions, and how they affect labor market outcomes. Some
other topics we will consider are labor discrimination and immigration. Not only will we investigate labor markets using
economic theory, but also we will use empirical findings from data to understand how these markets function in the real world
and see the theory in action. Additionally, labor plays a large role in the macroeconomy, so we also will examine shortage of
labor (unemployment). We will apply the theoretical concepts to real world labor issues, where each of you will choose a
labor topic to examine more carefully and share your analysis with your peers.



Reading: Lectures follow Ronald G. Ehrenberg and Robert S. Smiths Modern Labor
Economics: Theory and Public Policy (12
th
edition). You are responsible for all material in the
chapters assigned and none of the material in chapters unassigned, unless otherwise notified. You may use other editions of
the text, but do so at your own risk; I am not responsible for pointing out differences between the various editions.

Blackboard: Course announcements and assignments will be posted on our course Blackboard site. Lectures and
assignments may require reading outside material, such as academic publications and newspaper/magazine articles. These
readings, or instructions for accessing these readings, will be posted on Blackboard. It is your responsibility to check
Blackboard daily for course postings and announcements. Additional announcements may be given in class; should you miss
class, it is also your responsibility to check with a classmate for any information given in class. If you miss an assignment
or announcement, no exceptions will be made for you.

Suggested Reading: For example, you might follow The Wall Street Journal, The Economist, as well as a plethora of
great economics blogs (Ive posted general blog suggestions on Blackboard). Following major new sources on Twitter or
Facebook is a great way to see summaries and choose which content to read. You should pay attention to labor topics of all
kinds. I also suggest viewing the Bureau of Labor Statistics website, especially when labor reports are posted each month:
http://www.bls.gov/home.htm. Labor statistics are reported throughout the month; see the BLSs homepage. Start paying
attention to labor issues you havent, before, and apply economic concepts to explain those issues.



Course grades are based on the following criteria:

Homework (0%): No graded homework will be assigned. You are expected to complete the problems from the end of each
chapter. The solutions to odd-numbered questions are in the back of the textbook. I will not provide solutions to even-
numbered questions, but feel free to ask me if you need hints or help. I also suggest completing Review Questions (solutions
are provided for all of them) from the Companion Website: http://wps.aw.com/bp_ehrensmith_mlaborecon_12/243/62400/15974612.cw/index.html

Quizzes (10%): The first, second, or third class meeting after completing each chapter, you should expect a quizeither in
class or take homethat will be come directly from the Review Problems and the end-of-chapter problems. These quizzes
will range from 2 to 5 questions, multiple choice or short answer. You will have a time limit to take the quiz, depending on
how many questions (but ample time). I may or may not remind you of the quiz, and there may or may not be a quiz for every
chapter, or a quiz may include multiple chapters. Take-home quizzes could include longer essay style analyses. No make-up
quizzes will be given. No extra credit will be given. Your lowest quiz grade will be dropped from your quiz score. Therefore,
for n quizzes taken, your quiz grade will be the average of the top n-1 quiz scores.

Labor Issue/Policy Anal ysis (10%): Each student will choose a current labor topic and provide an economic analysis. This
analysis will include explaining the topic using economic theory of labor, graphical analysis, citation of statistics, and a review
of current research and news on the issue. Short presentations of your analysis will be given in class at the end of the
semester, in additional to brief comments of a current even analysis related to your topic earlier in the semester.
Evaluation
Description and Objectives
Instructor: Dr. J enny Hawkins Time/Location: MWF 11:30-12:20
Office: PBL 278 PBL 106
Email: [email protected] Office Hours: MW 1:30-3:00
and by appointment

Use subject Econ 332: subject
Required Materials
2


Speakers (4%): We will have at least one speaker visit during the semester to talk about labor issues. A short write up of
what you learned and what economic theory you saw at play will be assigned.

Exams (76% either (i) 25.33% each or (ii) 20.5%, 20.5% and 35% each): Four exams will be given, including a final
exam, but only three exam scores will count towards your final grade. Therefore, if you are happy with your course grade at
the end of the semester, you do not have to take the final exam. In this case, if you choose to take only the three midterms,
each exam will count as 25.33% of your course grade. If you choose to take the final exam, and your final exam score is
higher than one of your three midterm exams, then your total exam grade will be calculated as the final exam counting as
35% of your course grade and each midterm counting as 20.5% of your course grade. If you take the final, I will calculate
your course grade using calculations (i) and (ii), and use your highest exam grade. Midterm exams are not comprehensive,
but the final exam is comprehensive. The comprehensive final is Wednesday, December 10
th
, 8:30a-11:30a. Exam/Quiz
policies: Exams and quizzes consist of any combination of short answer, short essay, and multiple choice questions.
Absences: Each exam must be taken at the designated time and place. It is your responsibility to ensure your attendance
and arrange any travel plans accordingly. If you miss an exam without an accepted excuse, you will receive a grade of ZERO
for the missed exam. An excuse is acceptable only if it is received in writing within 24 hours of the examination. Your excuse
must be due to a serious and verifiable event. You have one week following the return of an exam to request a re-grade (in
writing), in which case your entire exam will be re-graded, resulting in a possible decrease, increase, or no change in your
exam score.




Attendance is not mandatory, though highly encouraged. I expect you to
apply the concept of opportunity cost in your decision-making. Therefore,
if you choose to miss class, miss an assignment, prepare for another class rather than this classs exam, etc., I assume you
have weighed the trade-offs and accept the consequences.
If you miss class, I will not provide copies of lecture notes and will not offer make-up lectures to you during office
hours. If you have questions about course material, certainly come to office hours, however, or send me an email
and I am happy to help. I advise not falling behind on the reading and studying material.
I highly encourage forming study groups; these help to keep up with the material, offer peer support to clarify
questions, and provide overall more efficient use of study time. If you are interested in forming a study group but
don't know anyone, let me know and I will help. Additionally, the University offers free tutoring (since this course
hasnt been offered in recent years, tutoring would be for help reviewing Econ 102 concepts); should you want one
contact ESS: https://students.case.edu/education/resources/tutoring/.
In a course of this nature, taking in-class notes on a computer is inadvisable. However, rewriting your notes,
possibly on your computer, after the lecture is a great study tool for reviewing and digesting the material.
Please turn off your mobile phone when you come to class. Any activity other than note-taking and participating in
class discussions is a distraction to all, very unappreciated, and noted.
Before each class, I highly encourage you to at least skim the chapter(s) we will cover. Even if you do not
understand the concepts and definitions, to have seen the words and have some idea of where we are headed will
make the lectures more productive and (hopefully) enjoyable. This can take no longer than enjoying a cup of
morning caffeine.
I highly suggest carefully reading the chapter and reviewing your lecture notes before completing the review
questions. The goal is to learn and retain the material, not cram.
o These last two points are habits difficult to begin and easily broken. Young warriors, be strong.




All students in this course are expected to adhere to University standards of academic
integrity. Cheating, plagiarism, misrepresentation, and other forms of academic dishonesty will
not be tolerated. This includes, but is not limited to: consulting with another person during an exam, turning in written work
that was prepared by someone other than you, making minor modifications to the work of someone else and turning it in as
your own, or engaging in misrepresentation in seeking a postponement or extension. Ignorance will not be permitted as an
excuse. If you are not sure whether something you plan to submit would be considered either cheating or plagiarism, it is
your responsibility to ask for clarification. When your name appears on a group product for a class, you are responsible for
the integrity of the work, even if you did not personally write the offending material. Information on citations and plagiarism
can be found at http://library.case.edu/ksl/researchtools/citation/index.html and http://www.indiana.edu/~wts/pamphlets/plagiarism.shtml. The academic integrity
policies and procedures that govern all undergraduates at CWRU can be found at https://students.case.edu/handbook/policy/integrity.html and
https://students.case.edu/handbook/judicial/aiboard.html.




Academic accommodations are available to students with documented disabilities. In order to
access the accommodations for which you may be qualified, please register with the Office of
Disability Resources (ESS, Sears 470) 216.368.5230. The staff there will verify your need for specific accommodations and
provide you with a memo to inform me of your needs. Once you have received this memo, please make an appointment to
see me privately to discuss your needs. Please be aware that any needed accommodations cannot be implemented
retroactively; therefore timely notification of your needs is in your best interest.




Accommodations
Attendance and Classroom Conduct
Academic Integrity
3





Note, we may move faster or slower than indicated.





I reserve the right to make minor changes to this syllabus.

Week Date Topic (37 lectures, 4 exams)
1 Aug 25, 27, 29
Ch 1: Introduction +Appendix 1A (Statistical Testing)
Ch 2: Overview of the Labor Market
2 and 3
Sept 1 (Labor Day no class)
Sept 3 12
Labor Demand: Ch 3-4
Ch 3: Demand for Labor
Ch 4: Labor Demand Elasticities
4 Sept 15, 17
Labor Supply: Ch 6-10
Ch 6: Supply of Labor to the Economy: The Decision to Work
4 Sept 19 MIDTERM I (Ch 16)
5 Sept 22, 24, 26 Ch 7: Labor Supply: Household Production, the Family and the Life Cycle
6 Sept 29, Oct 1, 3 Ch 8: Compensating Wage Differentials and Labor Markets
7 Oct 6, 8, 10 Ch 9: Investments in Human Capital: Education and Training
8 Oct 13, 15, 17 Ch 10: Worker Mobility: Migration, Immigration and Turnover
9 Oct 20, 22, 24
Topics in Labor Economics: Ch 11-16
Ch 11: Pay and Productivity: Wage Determination Within the Firm
10
Oct 27 (Fall break)
Oct 29
Ch 12: Gender, Race and Ethnicity in the Labor Market
10 Oct 31 MIDTERM II (Ch 7-11)
11 Nov 3, 5, 7 Ch 13: Unions and the Labor Market
12 Nov 10, 12, 14 Ch 14: Unemployment
13 Nov 17, 19, 21 Ch 15: Inequality in Earnings
14
Nov 24 26
(Nov 27 28 Tgiving holiday)
Ch 16: Labor-Market Effects of International Trade and Production Sharing
15 Dec 1 MIDTERM III (Ch 12-16)
15 Dec 3 5 Presentations of Labor Issue/Policy Analyses

Wednesday, Dec 10
8:30a11:30a
FINAL EXAM (cumulative)
Tentative Schedule