ECONOMICS 0401
INTRODUCTION TO LABOR ECONOMICS

Semester: Fall 2011
Instructor: George Berger
Office: 120 Biddle
Phone: 269-2982 or 269-2990/269-2991
Office Hours: MWF 2-3, TH 2-3:30 or by appointment

I.  TEXT

 George Berger, Supplementary Readings, Parts 1 and 2

II. ORGANIZATION OF COURSE

A. Introduction

1. Introduction

Supplementary Readings (48)

a. Charles Baird, "The Philosophical and Analytical Framework,"  Opportunity or Privilege: Labor Legislation in America, Social Philosophy and Policy Center, 1984, pp. 3-8, 10-18.

b. Richard Epstein, "In Defense of the Contract at Will," in Labor Law and the Employment Market: Foundations and Applications, ed. By Richard A. Epstein and Jeffrey Paul, Transactions Books: New Brunswick, 1985, pp. 9-14, 18-32.

c. Walter Olson, “Secure in What?” The Excuse Factory: How Employment Law is Paralyzing the American Workplace, The Free Press, 1997, pp. 284-296.

2. Overview of the Labor Market

Supplementary Readings (36)

a. Douglass North and Roger Leroy Miller, "The Economics of Bringing Back the Draft," The Economics of Public Issues, 5th edition, 1980, pp. 105-12.

b. Ronald Ehrenberg and Robert S. Smith, "Forced Labor in Mozambique," Modern Labor Economics, 5th edition, p. 50.

c. Robert Higgs, “The People at Work, 1865-1880,” Competition and Coercion: Blacks in the American Economy, 1865-1914, University of Chicago Press, 1980, pp. 47-54.

d. Benjamin Powell, “In Defense of ‘Sweatshops’,” Liberty Fund’s Library of Economics and Liberty, June 2, 2008, 5 pp. (online)

e. Charles Baird, "Recycling Labor" pp. 1-8. (online)

f. W. Michael Cox and Richard Alm, “Creative Destruction” Concise       Encyclopedia of Economics, Liberty Fund, 7 pp. (online)

g. EXTRA CREDIT. Douglas Irwin, "Does International Trade Kill Good American Jobs?" The American Enterprise, June 2004, pp. 31-33.

B. The Demand for Labor

 

1. The Demand for Labor  

Supplementary Readings (23)

a. Steven N. Kaplan, "Exchange: Are US CEOs Overpaid?"  Academy of Management Perspectives, May 2008, pp. 1-16

b. Dominic Basulto, "Why Do We Underpay Our Best CEOs?" The American, December 5, 2006, 5 pp. (online)

c. Richard B. McKenzie and Dwight Lee, “Executive ‘Overpayment’” Managing Through Incentives, Oxford University Press, 1998, pp. 159-74.

2. Labor Demand Elasticities

Supplementary Readings (44)

a. Douglas Holtz-Eakin and Gordon Gray,  “Global Competitiveness and the Corporate Income Tax,” Backgrounder No. 2265, Heritage Foundation, April 30, 2009, pp. 1-8. (online)

b. Kevin Hassett, “Closed for Business,” The American, February 7, 2007,  3 pp. (online)

c. Employment Policies Institute, "Questions and Answers About the Minimum Wage," pp. 1-11, 17-19, 1999 Addendum.

d. Richard McKenzie, "Minimum Wages: Revisions in the Conventional Wisdom," The American Job Machine, Universe Books, 1988, pp. 198-213.

e. Donald Boudreaux, "The Minimum Wage: An Unfair Advantage for Employers," The Freeman, October 1989, pp. 396-97.

f. David Forrest, "Minimum Wages, Poverty, and the Distribution of Income," Low Pay or No Pay? Institute of Economic Affairs, 1984, pp. 44-47.

 

EXAM 1 (Supplementary Readings, Homework, and Lectures)

 

C. The Supply of Labor

 

1. Investment in Human Capital: Education and Training  

Supplementary Readings (17)

a. George Leef, “Are Government Investments in Higher Education Worthwhile?” Liberty Fund Featured Article December 1, 2008, 5 pp.

b. Miguel Palacios, "Human Capital Contracts: "Equity-like" Instruments for Financing Higher Education" Cato Policy Analysis No. 462, December 16 2002,  pp 2-7.

c. Edwin S. Rubenstein, "The College Payoff Illusion," American Outlook, Fall 1998, pp. 14-18.

d. William McGurn, “Labor Day and the American Dream,” The Wall Street Journal,, August 31, 2009, 2 pp. 

D. Topics

1. Worker Mobility: Migration and Immigration

Supplementary Readings (44)

a. Jennifer Roback, "Exploitation in the Jim Crow South: The Market or the Law?" Regulation, September/December 1984, pp. 37-43.

b. Michael Fix and Jeffrey S. Passel,  “ Impact of Immigrants on US Labor Markets,” Immigration and Immigrants: Setting the Record Straight, The Urban Institute, 1994, pp. 47-54.

c. Douglas S Massey, "Backfire at the Border: Why Enforcement Without Legalization Cannot Stop Illegal Immigration," Cato Trade Policy Analysis No. 29, June 13, 2005, pp. 1-12.

d. Giovanni Peri, "America's Stake in Immigration: Why Almost Everybody Wins," The Milken Institute Review, Third Quarter 2007, pp. 41-49.

e. Daniel Griswold, " As Immigrants Move In, Americans Move Up," Free Trade Bulletin, July 21, 2009, 4 pp.

f. EXTRA CREDIT. Kerry Howley, "Guests in the Machine," Reason, January 2008, pp. 22-33. Can be found at www.reason.com/news/printer/123474.html

2. Unions and the Labor Market

Supplementary Readings (71)

a. Richard Freeman and James L. Medoff, "The Two Faces of Unionism," in Llyod G Reynolds, Stanley Masters, and Collette Moser, Readings in Labor Economics and Labor Relations, 3rd Edition, 1982, pp. 398-412.

b. John Burton, "Capitalism, Democracy, and the Problem of Organized Sectional Interests" in John Addison and John Burton, Trade Unions and Society: Some Lessons of the British Experience,  The Fraser Institute, 1984, pp. 129-53.

c. Charles Baird, "Toward Equality and Justice in Labor Markets," The Journal of Social, Political, and Economic Studies, Summer 1995, pp. 1-15. See http://www. sbe.csuhayward.edu/~sbesc/labour.html

d. Richard Vedder, “Right-to-Work Laws: Liberty, Prosperity, and Quality of Life,” Cato Journal, Winter 2010, 30:1, pp.171-80.

 

e. Richard Epstein, “The Ominous Employee Freedom of Choice Act,” Regulation, Spring 2009. pp. 48-54.

f. EXTRA CREDIT: Charles Baird, "Labor Law Reform: Lessons from History," Cato Journal, 10:1, Spring/Summer 1990, pp. 175-209

 

EXAM 2 (Supplementary Readings, Homework, and Lectures)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OBJECTIVES OF THE COURSE

1. Learn the basic concepts of labor economics. (Students who master these concepts should be able to earn a C in this course.)

2. Learn how to connect the basic concepts of economics to one another in chains of reasoning. (Students who master the basic concepts and learn how to connect some of these concepts together should be able to earn a B in this course.)

3. Learn how to apply economic reasoning to real world cases. (Students who master the basic concepts, learn how to consistently connect most of these concepts together, and learn how to apply these concepts to real world cases should be able to earn an A.)

EXPECTATIONS

 

1. I expect students to read assigned material BEFORE coming to lecture. That way, students will be familiar with the ideas presented in lecture and will take better class notes as a result.

2. I expect students to memorize the assigned definitions. But please note that I do not ask students just to memorize but also to understand the definitions. Like learning a foreign language, students must first memorize before they can understand.

3. I expect students to be on time for class and to be courteous in their behavior at all times in the classroom.  Two points are of particular importance here:

a. I CONSIDER TEXTING IN CLASS RUDE AND DISTRACTING. THEREFORE IF I EVEN SEE A CELL PHONE DURING CLASS I WILL TAKE THAT PERSON’S CELL PHONE AND PUT IT ON THE PODIUM ( IT MAY BE  RECLAIMED AFTER CLASS).  FOR EVERY CLASS AFTER THIS OCCURS, THIS PERSON MUST PUT HIS/HER CELL PHONE ON THE PODIUM BEFORE CLASS BEGINS. IF THIS PARTICULAR PERSON IS LATE, HE/SHE MUST PUT THEIR CELL PHONE ON THE PODIUM BEFORE TAKING A SEAT IN THE BACK OF THE CLASS.

 

b. IN THE PAST STUDENTS IN MY CLASS HAVE OFTEN LEFT DURING CLASS (TO GO TO THE BATHROOM, TO TAKE A PHONE CALL, WHATEVER) AND RETURNED SHORTLY.  I ALSO CONSIDER THIS RUDE AND DISTRACTING. SO THIS BEHAVIOR MUST STOP. IF ANYONE LEAVES IN THE MIDDLE OF CLASS: (i) I WILL MARK YOU ABSENT AND (ii) ASK THAT YOU NOT COME BACK FOR THE REMAINDER OF THE CLASS. IF YOU ARE ILL BY ALL MEANS LEAVE CLASS IF YOU NEED TO ( ALTHOUGH IN THIS CASE IT MIGHT BE WISE NOT TO COME TO CLASS IN THE FIRST PLACE).

III. COURSE POLICIES

01. The total number of points in the course will be distributed as follows:

Exam 1 100
Exam 2 100
Quizes  100   

    Total 300

 

While I cannot specify what number of points equals an A, what number of points equals a B, etc., I will indicate these grades as the semester progresses.

02. Your grade can be calculated as follows: (1) Assume you earned a 73 on the first exam. Assume that all scores that fall into the range 70-79 are Cs and all scores that fall into the range 80-89 are Bs. (2) Assume you earned an 83 on the second exam. Assume that all scores that fall into the range 80-89 are Bs. Your total number of points earned after the second exam add to 156. What is your letter grade? Add together the minimum scores for a B which in this case is 160 points. Since your point total is less than the minimum score to earn a B, you have a C+ in the course after the second exam. (NOTE: The ranges used in this example are not necessarily the ranges that I will use during the course of the semester.)

03. Final grades will be assigned using +'s and -'s where appropriate.

04. Both exams will be a combination of definitions and essay/problem questions. A typical test will include 10 definitions (30 points) and approximately 3 essay questions usually with two or three parts (70 points). These exams will draw on material selected from the definition sheets, assigned homework exercises, and supplementary readings. Extra credit questions will be included on all exams. This is the only place extra credit can be done.

05. Exams will be given in two stages. In the first stage, students match the correct vocabulary word with its correct definition BY MEMORY (no notecards allowed). In the second stage, students may consult an unlimited number of notecards to complete the essay/problem section of the exam.

NOTE: THESE NOTECARDS MUST BE HANDWRITTEN. XEROXED OR TYPED NOTECARDS OR NOTECARDS WITH XEROXED OR TYPED MATERIAL PASTED ON THEM ARE UNACCEPTABLE. I WILL REQUIRE ALL STUDENTS TO TURN IN THEIR NOTECARDS TO ME AFTER THE EXAM. PLEASE TYPE YOUR NAME ON EACH NOTECARD YOU USE. IF I DISCOVER THAT SOMEONE HAS USED XEROXED OR TYPED NOTECARDS THAT PERSON WILL RECEIVE A ZERO ON THE EXAM.

06. Suggestions for reading the articles in the supplementary reader. First, read the introduction and conclusion for the article to get a general idea of what is being discussed. Second, read the article through carefully and identify which sections provide answers to the supplementary reading questions. Third, read the article again this time writing out the answers to the supplementary reading questions on notecards. CAUTION: I STRONGLY URGE STUDENTS TO USE THEIR OWN WORDS IN WRITING THE NOTECARDS. I ALSO RECOMMEND THAT STUDENTS USE CONCEPTS DEVELOPED IN LECTURE TO EXPLAIN THEIR ANSWERS TO THE SUPPLEMENTARY READING QUESTIONS. 

07. Exam dates will be:

Exam 1 - Oct 19 (approximately)
Exam 2 – Thurs Dec 15 @ 3 PM

 

Exam 2 must be taken on the assigned day. Exceptions will be allowed only if students provide evidence of one other exams on the scheduled date. 

08. Make-up exam policy.

 

a. In the event of a prolonged absence (more than a single class or single day), students must immediately contact the Office of the Assistant to the Vice President of Academic Affairs, Blackington 248, (814-269-2078) to be excused from classes. For all other absences on the test date students must (1) notify before the exam of their absence and (2) provide a doctor’s excuse. Students who satisfy these requirements will be able to take a make-up exam.

 

b. If students do neither of these things the instructor will either administer a make-up with a penalty to be determined for borderline excuses or give the student a zero for absences deemed unexcused.  

09. Exams are NOT cumulative but cover only the material after the previous exam.

10. Below is a suggested reading schedule:

WEEK 01: AUG 31-SEP 02-Baird

WEEK 02: SEP 07-SEP 09-Epstein

WEEK 03: SEP 14-SEP 16-Olson, North and Miller, Ehrenberg and Smith

WEEK 04: SEP 21-SEP 23-Higgs, Powell, Baird, Cox and Alm

WEEK 05: SEP 28-SEP 30-Kaplan, Basulto, McKenzie and Lee

WEEK 06: OCT 05-OCT 07-Eakin and Gray, Hassett, Employment Policies Institute

WEEK 07: OCT 12-OCT 14-McKenzie, Boudreaux, Forrest

 

WEEK 08: OCT 19-OCT 21-Exam 1

 

WEEK 09: OCT 26-OCT 28-Leef, Palacios

WEEK 10: NOV 02-NOV 04-Rubenstein, McGurn

WEEK 11: NOV 09-NOV 11-Roback, Smith and Edmonston

WEEK 12: NOV 16-NOV 18-Massey, Peri, Griswold

WEEK 13: NOV 23

WEEK 14: NOV 30-DEC 02-Freeman and Medoff, Burton

WEEK 15: DEC 07-DEC 09-Vedder, Baird

11. The Quizzes.

·        Eleven Quizzes will be given in the course of the semester, six before the first exam and five before the second exam. You may drop one quiz score but may do so only if you take all eleven of the quizzes.

·        The quizzes are worth ten points each and will cover only the readings specified in the quiz schedule. See below for the schedule.

 

·        You should prepare for the quiz by reading the article and answering the questions from the supplementary readings question list for that article. You may use notecards during the quiz.

·        I will allow ten minutes for the quiz at the beginning of class.  

QUIZ SCHEDULE

 

WEEK 02- SEP 07: Baird

WEEK 03- SEP 14: Epstein

WEEK 04- SEP 21: Olson, North and Miller, Ehrenberg and Smith

WEEK 05- SEP 28: Higgs, Powell, Baird, Cox and Alm

WEEK 06- OCT 05: Kaplan, Basulto, McKenzie and Lee

WEEK 07- OCT 12: Eakin and Gray, Hassett, Employment Policies Institute

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WEEK 10- NOV 02: Leef, Palacios

WEEK 11- NOV 09: Rubenstein, McGurn

WEEK 12- NOV 16: Roback, Smith and Edmonston

WEEK 13- NOV 23: Massey, Peri, Griswold

WEEK 15- DEC 07: Freeman and Medoff, Burton

12. Homework problems and answers are currently available to students on my website. Material on Homework #1 will on Exam 1 and material from Homework #2 on Exam #2.  EXAM QUESTIONS WILL BE DIFFERENT FROM THE HOMEWORK PROBLEMS but if you have worked on the latter, you should be able to answer the former.

13. Class attendance is required. I will keep track of attendance and allow you up to 3 absences without penalty. For each absence over 3, I will deduct three points from your overall point total.

14. Anyone caught cheating on any exam will get a zero on that exam. This will make passing the course very difficult. Additionally, anyone copying another person's written work and submitting it as his own will receive a zero. (NOTE: The person from whom it was copied will also receive a zero.)

15. If you have a disability for which you are or may be requesting an accommodation, you are encouraged to contact both your instructor and the Office of Health & Wellness (OHW), G-10 Student Union Building, (814) 269-7119 to schedule an appointment as early as possible in the term. OHW will verify your disability and determine reasonable accommodations for this course.