ECM3710 Labour economics

This unit introduces you to the study of labour markets. Our focus will be on implementing tools of economic analysis to first describe the key issues regarding functioning of labour markets. We will describe and examine how individuals decide how much to work, how firms structure their employment decisions and how these two decisions interact to determine the labour market equilibrium. We will then describe and analyse how government policies ranging from minimum wages, income support and income tax credits affect the labour supply and demand decisions. We will next describe and examine how well these theories explain observed patterns in the data. In a next step, we will critically appraise how the predictions are contingent on the assumption of competitive markets, and how these need to be modified in the presence of market power for firms.

The unit will then apply the same building blocks to examine and appraise some topical issues affecting the labour market: human capital formation, immigration, inequality, gender, trade unions, and the gig economy. These topics will be examined not only through implementing workhorse economic models but will also stress on appraising what the empirical evidence tells us about the accuracy of the predictions derived using these economic tools.