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ECON303: Labor Economics

  • Unit 1: Introduction  

    The three key players in the labor market are the worker, the firm, and the government.  In the first part of this unit, you will learn that the interactions between these players can be studied in one of two ways:  by observing and predicting their behavior in various situations in the labor market arena (the positive economics way) or by placing a value judgment on their interactions and determining whether the situation is desirable or harmful (the normative economics way).  This unit will also teach you how the labor force is measured and will provide you with a simple supply-demand framework designed to show you how the labor market works.

    Unit 1 Time Advisory

    This unit should take you 7 hours to complete.

    ☐    Subunit 1.1: 2 hours* 

    ☐    Subunit 1.2: 1 hour

    ☐    Subunit 1.3: 2.5 hours** 

    ☐    Subunit 1.4: 1.5 hours

    *(Note: The audio narration is a 40 minute lecture.)

    **(Note: The audio narration is a 1.5 hour lecture.)

    Unit1 Learning Outcomes

    Upon successful completion of this unit, students will be able to:

    • Distinguish between positive economics and normative economics pertaining to the labor market.

    - Identify the variables required to measure the labor force.

    - Identify the different components of the labor market.

    • Calculate equilibrium wages using the simple model of labor demand and supply.
  • 1.1 Concepts in Labor Economics  

    • Lecture: SUNY-Oswego: Professor John Kane's Lecture notes on Introduction to Labor Economics: “Introduction (Chapter 1)”

      Link: SUNY-Oswego:  Professor John Kane's Lecture notes on Introduction to Labor Economics: Introduction (Chapter 1)” (HTML, Adobe Flash, or Powerpoint)
       
      Instructions:  Please click on chapter 1 from the Table of Contents.  Note that the material is presented in three formats: single document HTML format, narrated PowerPoint, and PowerPoint Slideshow. Please go through the narrated PowerPoint to best understand the material.  You can read the HTML text to review the material after listening to the audio.  However, you may skip the notes presented in the PowerPoint slides as they are a repetition of the slides that accompany the audio.  If the audio does not work at first, refresh your browser.  This reading covers subunits 1.1.1-1.1.3.
       
      Terms of Use: Please respect the copyright and terms of use displayed on the web pages above.

  • 1.1.1 The Role of Positive Economics in Labor Economics  

    Note: This subunit is covered by the reading assigned under Unit 1.  

  • 1.1.2 Normative Economics and Government Policy  

    Note: This subunit is covered by the reading assigned under Unit 1.  

  • 1.1.3 Market Failure and its Inability to Achieve Pareto Efficiency in Labor Markets  

    Note: This subunit is covered by the reading assigned under Unit 1.  

    • Assessment: Addison Wesley Companion Website: Ronald G. Ehrenberg and Robert S. Smith's Modern Labor Economics, 8th Edition: “Student Resources: Chapter1: Introduction

      Link: Addison Wesley Companion Website: Ronald G. Ehrenberg and Robert S. Smith's Modern Labor Economics, 8th Edition:Student Resources: Chapter 1: Introduction” (HTML)
       
      Instructions:  Please click on the “Examples” icon on the left hand bar.  Please read the two examples analytically and then click on the “Quiz” icon on the left hand bar to assess your understanding of this chapter.
       
      Note on the link: After reading the examples, try to extract the questions that pertain to normative and positive economics, respectively.  (For instance, from the first example, you can frame the following question: "Ceteris Paribus, do high wages offered by a competitor cause an influx of workers from the low wage employer to the high wage employer?"  Ask yourself whether it belongs to the normative economics or the positive economics category.)
       
      Terms of Use: Please respect the copyright and terms of use displayed on the web pages above.

  • 1.2 Measuring the Labor Force  

    • Reading: New York University: Professor Matthew Wiswall's “Lecture Notes on Labor Economics”

      Link: New York University: Professor Matthew Wiswall's “Lecture notes on Labor Economics” (PDF)
       
      Instructions: Please click on “Lecture Notes” to access the pdf file with the lecture notes.  Scroll down to section 2, "Overview of the Labor Market," on page 7 and read all the way up to page 12, completing section 2.3, titled "Measurement."
       
      Terms of Use: Please respect the copyright and terms of use displayed on the web pages above.

  • 1.3 The Labor Market  

    • Lecture: SUNY-Oswego: Professor John Kane's Lecture notes on Introduction to Labor Economics: “Labor Markets (Chapter 2)”

      Link: SUNY-Oswego:  Professor John Kane's Lecture notes on Introduction to Labor Economics: Labor Markets (Chapter 2)” (HTML, Adobe Flash, or Powerpoint)
       
      Instructions:  Please click on chapter 2 from the Table of Contents.  Note that the material is presented in three formats: Single document HTML format, narrated PowerPoint, and PowerPoint Slideshow. Please go through the narrated PowerPoint to best understand the material.  You can read the HTML text to review the material after listening to the audio.  However, you may skip the notes presented in the PowerPoint slides as they are a repetition of the slides that accompany the audio. If the audio does not work at first, refresh your browser.  This reading covers subunits 1.3.1-1.3.5 and subunits 1.4.1-1.4.3.
       
      Terms of Use: Please respect the copyright and terms of use displayed on the web pages above.

  • 1.3.1 National and Local Labor Markets  

    Note: This subunit is covered by the reading assigned under Unit 1.3. 

  • 1.3.2 Labor Force and Unemployment  

    Note: This subunit is covered by the reading assigned under Unit 1.3. 

  • 1.3.3 Sectoral Pattern of Unemployment  

    Note: This subunit is covered by the reading assigned under Unit 1.3. 

  • 1.3.4 Nominal and Real Wages  

    Note: This subunit is covered by the reading assigned under Unit 1.3. 

  • 1.3.5 Wages, Earnings, Total Compensation, and Income  

    Note: This subunit is covered by the reading assigned under Unit 1.3. 

  • 1.4 Determining Wages in the Labor Market  

    • Reading: www.Bized.co.uk's The Labour Market: Supply and Demand

      Link: www.Bized.co.uk's The Labour Market: Supply and Demand (Powerpoint)
       
      Instructions:  Please scroll down to "Resources" and click on the "PowerPoint Presentation - The Labour Market: Supply and Demand."  This set of slides supplements the reading from the previous section and explains labor demand and labor supply in greater detail.
       
      Terms of Use: Please respect the copyright and terms of use displayed on the web pages above.

  • 1.4.1 The Demand for Labor  

    Note: This subunit is covered by the readings assigned beneath subunits 1.3 and 1.4. 

  • 1.4.2 The Supply of Labor  

    Note: This subunit is covered by the readings assigned beneath subunits 1.3 and 1.4. 

  • 1.4.3 Equilibrium in the Labor Market  

    Note: This subunit is covered by the readings assigned beneath subunits 1.3 and 1.4.