Advanced Topic in Labour Economics (ECO6193A) Page 1 of 6

ADVANCED TOPICS IN LABOUR ECONOMICS

ECO6193A
PIERRE BROCHU
FALL 2014

Course schedule: Thursday 14:30-17:30
Course location: FSS 9003
Office: FSS 9031
Office hours: Thursday 13:00-14:00; Friday 13:15-14:15
Telephone: 562-5800 ext. 1424
E-mail: pbrochu@uottawa.ca


OFFICIAL COURSE DESCRIPTION

This is the third course in the labour sequence and is aimed at both M.A. and PhD students.
Topics will include: labour demand and minimum wages, employment and unemployment,
labour market transitions, inequality and unions.

An important goal of this course is for students to learn how to use economic data to address an
economic question of interest. As such, students will be required to apply econometric methods
to data using the STATA software package. Students will be able to access STATA in the
undergraduate computer lab located in VNR2008, VNR2015 and VNR2025.

EVALUATION

Empirical assignments 15%
Term paper 35%
Final exam 50%

The term paper is due on the last day of class (i.e. November 27th).


GENERAL COMMENTS

Class notes will not be made available to students. If you miss a class, I encourage you to ask a fellow
student about the content missed and borrow their notes.








Absence from an examination or late submission of an assignment

Absence from any examination or test, or late submission of assignments due to illness, must be justified;
otherwise, a penalty will be imposed. The Faculty reserves the right to accept or reject the reason offered. Reasons
such as travel, employment, and misreading the examination schedule are not usually accepted.



Advanced Topic in Labour Economics (ECO6193A) Page 2 of 6




Beware of Academic Fraud!

Academic fraud is an act committed by a student to distort the marking of assignments, tests, examinations, and
other forms of academic evaluation. Academic fraud is neither accepted nor tolerated by the University. Anyone
found guilty of academic fraud is liable to severe academic sanctions.

Here are a few examples of academic fraud:
engaging in any form of plagiarism or cheating;
presenting falsified research data;
handing in an assignment that was not authored, in whole or in part, by the student;
submitting the same assignment in more than one course, without the written consent of the professors
concerned.
In recent years, the development of the Internet has made it much easier to identify academic plagiarism. The
tools available to your professors allow them to trace the exact origin of a text on the Web, using just a few
words.
In cases where students are unsure whether they are at fault, it is their responsibility to consult the Universitys
Web site at the following address: : http://www.uottawa.ca/plagiat.pdf .
Persons who have committed or attempted to commit (or have been accomplices to) academic fraud will be
penalized. Here are some examples of the academic sanctions, which can be imposed:
a grade of F for the assignment or course in question;
an additional program requirement of between 3 and 30 credits;
suspension or expulsion from the Faculty.
Last session, most of the students found guilty of fraud were given an F for the course and had between
three and twelve credits added to their program requirement.
For more information, refer to:



TEXTBOOK AND READINGS

There are no required texts for this course.

Students that who have no undergraduate preparation in labour economics may wish to consult an
undergraduate labour text such as: Labour Market Economics by Benjamin, Gunderson, Lemieux and
Riddell, or Modern Labor Economics by Ehrenberg and Smith.

For more advanced references, students may wish to consult the Handbooks of Labor Economics
(volumes 3A, 3B, 3C, 4A and 4C) or Labor Economics by Cahuc and Zylberberg.

The reading list is meant to be comprehensive in scope, and as such, students are not expected to read all
items in the reading list. Starred (*) items are, however, required readings. Finally, additional readings
may be added to the course outline as the term progresses. Students will be made aware of such changes
through in-class announcements.

COURSE OUTLINE

1. Income Inequality

Advanced Topic in Labour Economics (ECO6193A) Page 3 of 6
Autor, D. H., Katz, L. F. and Kearney, M. S. (2006), The polarization of the U.S. labor market,
American Economic Review 96(2), 189194.
Autor, D. H., Katz, L. F. and Kearney, M. S. (2008), Trends in U.S. wage inequality: Revising
the revisionists, Review of Economics and Statistics 90(2), 300323.
Beaudry, P. and Green, D. A. (2000), Cohort patterns in Canadian earnings: Assessing the role
of skill premia in inequality trends, Canadian Journal of Economics 33(4), 907936.
Beaudry, P. and Green, D. A. (2003), Wages and employment in the United States and
Germany: What explains the differences?, American Economic Review 93(3), 573602.
Beaudry, P. and Green, D. A. (2005), Changes in US wages, 1976-2000: Ongoing skill bias or
major technological change?, Journal of Labour Economics 23(3), 609648.
Beaudry, P., Green, D. A. and Sand, B. (2013), The great reversal in the demand for skill and
cognitive tasks, NBER Working Paper No. 18901.
Blau, F. D. and Kahn, L. M. (1996), International differences in male wage inequality:
Institutions versus market forces, Journal of Political Economy 104(4), 791837.
DiNardo, J., Fortin, N. M. and Lemieux, T. (1996), Labor market institutions and the
distribution of wages, 1973-1992: A semiparametric approach, Econometrica 64(5),
10011044.
Frenette, M., Green, D. A. and Milligan, K. (2007), The tale of the tails: Revisiting recent trends
in after-tax income inequality using census data, Canadian Journal of Economics 40(3),
734764.
*Frenette, M., Green, D. A. and Milligan, K. (2009), Taxes, transfers, and Canadian income
inequality, Canadian Public Policy 35(4), 389-411.
*Fortin, N., Green D. A., Milligan, K. and Riddell, C. (2012), Canadian inequality: Recent
development and policy options, Canadian Public Policy 38(2), 121-145.
Gottschalk, P. and Moffitt, R. (2009), The rising instability of U.S. earnings, Journal of
Economic Perspectives 23(4), 324.
*Green, D. A. and Sand, E. (2014), Has the Canadian labour market polarized?, CLSRN
Working Paper No. 133.
Juhn, C., Murphy, K. M. and Pierce, B. (1993), Wage inequality and returns to skill, Journal of
Political Economy 101(3), 410442.
Katz, L. F. and Autor, D. (1999), Changes in the wage structure and earnings inequality, in O.
Ashenfelter and D. Card, eds, Handbook of Labor Economics, Vol. 3, Elsevier, New
York, chapter 26, pp. 14631555.
Katz, L. F. and Murphy, K. M. (1992), Changes in relative wages, 1963-1987: Supply and
demand factors, Quarterly Journal of Economics 107(1), 3578.
Lefter, A., and Sand, B. (2011), Job polarization in the U.S.: A reassessement of the evidence
from the 1980s and 1990s, University of St. GAllen Working paper No. 2011-03.
*Saez, E., and Veall M. (2005). The Evolution of high incomes in Northern America: Lessons
from Canadian evidence. American Economic Review 95 (3): 831-49.

2. Labour Demand and Minimum Wages

Labour Demand
Hamermesh, D. S. (1993), Labor Demand, Princeton University Press, Princeton.

Minimum Wages

Baker, M., Benjamin, D. and Stanger, S. (1999), The highs and lows of the minimum wage
effect: A time-series cross-section study of the Canadian law, Journal of Labor
Economics 17(2), 318350.
Advanced Topic in Labour Economics (ECO6193A) Page 4 of 6
*Brochu, P. and Green D. A. (2013) The impact of minimum wages on labour market
transitions, Economic Journal 123(573), 1203-1235.
Brown, C. (1999), Minimum wage, Employment and the distribution of income, in O.
Ashenfelter and D. Card, eds, Handbook of Labor Economics, Vol. 3A, North Holland,
New York, chapter 32, pp. 21012163.
Brown, C., Gilroy, C. and Kohen, A. (1982), The effect of the minimum wage on teenage
employment and unemployment, Journal of Economic Literature 20(2), 487528.
Campolieti, M., Fang, T. and Gunderson, M. (2005), Minimum wage impacts on youth
employment transitions, 1993-1999, Canadian Journal of Economics 38(1), 81104.
*Card, D. and Krueger, A. B. (1994), Minimum wage and employment: A case study of the
fast-food industry in New Jersey and Pennsylvania, American Economic Review 84(4),
772793.
Card, D. and Krueger, A. B. (2000), Minimum wage and employment: A case study of the fast-
food industry in New Jersey and Pennsylvania: Reply, American Economic Review
90(5), 13971420.
*Dube, A., William L. T., and Reich, M. (2012), Minimum wage effects across state borders:
Estimates using contiguous states, Review of Economics and Statistics 92(4), 945-964.
*Dube, A., William L. T., and Reich, M. (2012), Minimum wage shocks, employment flows
and labor market frictions, ILRE Working Paper.
Gramlich, E. M. (1976), Impact of minimum wages on other wages, employment, and family
incomes, Brookings Papers on Economic Activity 7(1976-2), 409462.
Grossman, J. B. (1983), The impact of the minimum wage on other wages, Journal of Human
Resources 18(3), 359378.
Neumark, D., Schweitzer, M. and Wascher, W. (2004), Minimum wage effects throughout the
wage distribution, Journal of Labor Economics 39(2), 425450.
Neumark, D. and Wascher, W. L. (2000), Minimum wage and employment: A case study of the
fast-food industry in New Jersey and Pennsylvania: Comment, American Economic
Review 90(5), 13621396.
*Newmark, D. and Wascher, W. L. (2007), Minimum wages and employment, IZA DP No.
2570.
*Portugal. P., and Cardoso, A. R. (2006) Disentangling the minimum wage puzzle: An analysis
of worker accessions and separations, Journal of the European Economic Association
4(5), 988-1013.



3. Imperfect Labour Market

Boal, W. M. and Ransom, M. R. (1997), Monopsony in the labor market, Journal of Economic
Literature 35(1), 86112.
*Burdett, K. and Mortensen, D. T. (1998), Wage differentials, employer size, and
unemployment, International Economic Review 39(2), 257273.
Falch, T. (2010), The elasticity of supply at the establishment level, Journal of Labor
Economics 28(2), 237266.
Manning, A. (2003), Monopsony in Motion: Imperfect Competition in Labor Markets, Princeton
University Press, Princeton.
Pissarides, C. A. (2000), Equilibrium Unemployment Theory, 2nd edn, MIT Press, Cambridge,
Massachusetts.
*Rogerson, R., Shimer, R. and Wright, R. (2005), Search-theoretic models of the labor market:
A survey, Journal of Economic Literature 43(4), 959988.
Advanced Topic in Labour Economics (ECO6193A) Page 5 of 6
Staiger, D. O., Spetz, J. and Phibbs, C. S. (2010), Is there monopsony in the labor market?
evidence from a natural experiment, Journal of Labor Economics 28(2), 211236.
Van den Berg, G. J. and Ridder, G. (1998), An empirical equilibrium search model of the labor
market, Econometrica 66(5), 11831221.


4. Unemployment, Employment, and Labour Market Transitions

*Brochu, P. (2013), The source of change of the new Canadian job stability patterns, Canadian
Journal of Economics 46(2), 412-440.
Brochu, P. and Zhou, L. (2009), Is job insecurity on the rise? Evidence from Canadian
perception data, Canadian Journal of Economics 42(4), 1305-1325.
Davis, S. J., Faberman, J. and Haltiwanger, J. (2006), The flow approach to labor markets: New
data sources and micro-macro links, Journal of Economic Perspectives 20(3), 326.
Farber, H. S. (1998), Has the rate of job loss increased in the nineties, Working Paper 5014,
Industrial relations Section Princeton University.
Green, D. A. and Riddell, W. C. (1993), The economic effects of unemployment insurance in
Canada: An empirical analysis of UI disentitlement, Journal of Labor Economics 11(1),
S96S147.
Hall, R. E. (1982), The importance of lifetime jobs in the U.S. economy, American Economic
Review 72(4), 716724.
*Heisz, A. (2005), The evolution of job stability in Canada: Trends and comparisons with U.S.
results, Canadian Journal of Economics 38(1), 105127.
Jones, S. R. G. and Riddell, W. C. (1999), The measurement of unemployment: An empirical
approach, Econometrica 67(1), 147162. Notes and Comments.
*Neumark, D., Polsky, D. and Hansen, D. (1999), Has job stability declined yet? New evidence
for the 1990s, Journal of Labor Economics 17(4), S29S64.
Riddell, W. C. (2005), Why is Canadas unemployment rate persistently higher than in the
United States?, Canadian Public Policy 31(1), 93100.
Schmidt, S. R. (1999), Long-run trends in workers beliefs about their own job security:
Evidence from the general social survey, Journal of Labor Economics 17(4), S127
S141.
Swinnerton, K. A. and Wial, H. (1995), Is job stability declining in the U.S. economy?,
Industrial and Labor Relations Review 48(2), 293304.
Swinnerton, K. A. and Wial, H. (1996), Is job stability declining in the U.S. economy? a reply
to Diebold, Neumark and Polsky, Industrial and Labor Relations Review 49(2), 352
355.
Ureta, M. (1992), The importance of lifetime jobs in the U.S. economy, revisited, American
Economic Review 82(1), 322335.


5. Unions

Bennett, J. T. and Kaufman, B. E., eds (2007), what Do Unions Do? A Twenty-Year Perspective,
Transaction Publishers, New Brunswick, U.S.A.
Blanchflower, D. G. and Bryson, A. (2004), What effect do unions have on wages now and
would Freeman and Medoff be surprised?, Journal of Labor Research 25(3), 383414.
Card, D. (1996), The effect of unions on the structure of wages: A longitudinal analysis,
Econometrica 64(4), 957979.
Advanced Topic in Labour Economics (ECO6193A) Page 6 of 6
Card, D., Lemieux, T. and Riddell, W. C. (2005), Unions and the wage structure, Journal of
Labor Research 25(4), 519559.
Farber, H. S. (1983), The determination of the union status of workers, Econometrica 51(5),
14171437.
Farber, H. S. (1986), Chapter 18 the analysis of union behavior, Vol. 2 of Handbook of Labor
Economics, Elsevier, pp. 10391089.
Farber, H. S. (1990), The decline of unionization in the United States: What can be learned from
recent experience, Journal of Labor Economics 8(1), S8S25.
Farber, H. S. (2001), Notes on the economics of labor unions, Working Papers 452, Princeton
University, Department of Economics, Industrial Relations Section.
Farber, H. S. and Saks, D. H. (1980), Why workers want unions: The relative wages and job
characteristics, Journal of Political Economy 88(2), 349369.
Freeman, R. B. and Medoff, J. L. (1984), What Do Unions Do?, Basic Books, New York.
Hirsch, B. T. (2008), Sluggish institutions in a dynamic world: Can unions and industrial
competition coexist?, Journal of Economic Perspectives 22(1), 153176.
Lewis, H. G. (1986), Union Relative Wage Effects: A Survey, Chicago University Press,
Chicago.
Riddell, C. and Riddell, W. C. (2004), Changing patterns of unionisation: The North American
experience, 1984-1998, in A. Verma and T. A. Kochan, eds, Unions in the 21st
Century, Palgrave Macmillan, London, chapter 11, pp. 146164.
Schnabel, C. (2003), Determinants of trade unions, International Handbook of Trade Unions,
Eward Elger.


Technical Readings

Angrist, J. D. and Krueger, A. B. (1999), Empirical strategies in labor economics, in O.
Ashenfelter and D. Card, eds, Handbook of Labor Economics, Vol. 3A, Elsevier, New
York, chapter 23, pp. 12771366.
Brochu, P. (2011), Estimating labour market transitions and continuations using repeated cross
sectional data, Economics Letters 111(1), 84-87.
Brochu, P. (2014a), `Econometrics Labour Notes I, Unpublished Manuscript.
Brochu, P. (2014b), `Econometrics Labour Notes II, Unpublished Manuscript.
Green, D. A. and Milligan, K. (2010), The importance of the long form census to Canada,
Canadian Public Policy 36(3), 383388.
Heckman, J. J. (1979), Sample selection bias as a specification error, Econometrica 47(1), 153
162.
Jones, F. L. (1983), On decomposing the wage gap: A critical comment on Blinders methods,
Journal of Human Resources 18(1), 126130.
Oaxaca, R. (1973), Male-female wage differentials in urban markets, International Economic
Review 14(3), 693709.
Oaxaca, R. L. and Ransom, M. R. (1994), On discrimination and the decomposition of wage
differentials, Journal of Econometrics 61, 521.
Wooldridge, J. M. (2010), Econometric Analysis of Cross Section and Panel Data, 2
nd
edn, MIT
Press, Cambridge, Massachusetts.