Department of Economics
University of California - Davis
Fall 1998

Professor Colin Cameron
SSH Building 1147 752-8396

Tues Thurs 1.40 – 3.00 p.m. Wellman 6

Office Hours:
Tuesday afternoon 3.10 p.m. – 4.40 p.m.
Thursday morning 8.30 a.m. – 10.00 a.m.

Teaching Assistant:
Ping-Hsuan (Loretta) Fung SSH Room 1101
Discussion Sections:
Tues 4.10 - 5.00 p.m. and Tues 5.10 - 6.10 p.m.
T.A. Office Hours:

Course Goals: To analyze the U.S. labor market, using the tools of neoclassical micro-economic theory.

Pre-requisites: The essential pre-requisite for this course is Economics 100 (which in turn requires Mathematics 16A-B or 21A-B). It will be useful to review demand-supply analysis and indifference curve analysis from Economics 100.

Course Outline:

1. Labor Market

Ch.1 Introduction. (1 class)

Ch.2 Overview of the Labor Market (1 class)

2. Demand for Labor (and effects of minimum wages and technological change)

Ch.3 The Demand for Labor  (2 classes)

Ch.4 Labor Demand Elasticities  (1 class)

Ch.5 Quasi-Fixed Labor Costs  (1 class)

3. Supply of Labor (and effect of welfare programs on work incentives)

Ch.6 The Supply of Labor  (4 classes)

Ch.7 Household Production and the Life Cycle  (1 class)

4. Compensation and Unions

Ch. 8 Compensating Wage Differentials  (2 classes)

Ch.11 Pay and Productivity  (2 classes)

Ch.13 Unions and the Labor Market   (2 classes)

Other topics in labor economics, including human capital theory, labor market discrimination and income distribution are covered in Economics 151B.

Textbook: Ronald G. Ehrenberg and Robert S. Smith, Modern Labor Economics: Theory and Public Policy, 6th Edition, Addison-Wesley, 1997.

Course Pack: On sale at Navin's Copy Shop (3rd Street between A and B) is Coursepack for Labor Economics 151A.

This contains:

· Some supplemental class notes.

· Readings.

· Problem sets and solutions (these are voluntary practice problems).

· A past year's exams and solutions.

Readings: There will be two readings contained in the coursepack.

Exams will include questions on these readings, which will be discussed in class.

T. Kim and L.J. Taylor, "The Employment Effect in Retail Trade of California’s 1988 Minimum Wage Increase", Journal of Business and Economic Statistics, 1995, 175-182.

K.A. Bender, "The Changing Determinants of U.S. Unionism: An Analysis using Worker-Level Data", Journal of Labor Research, 1997, 403-423.

Course Grading:

Quizzes   10%
Thursday classes will have a 15 minute quiz.
Oct 8, Oct 15, Nov 5, Nov 12, Dec 3, Dec 10.
Best 5 of 6.

Midterm 1   22.5%
Thursday Oct 22 Chs. 1-5

Midterm 2   22.5%
Thursday Nov 19 Chs. 6-7

Final   45%
Tuesday Dec 15  1.30p.m.-3.30p.m. Comprehensive
(This date is the correct date. The date given on the original syllabus was wrong).

Exams are closed book with a mixture of short answer (about two-thirds) and multiple choice (about one-third) questions. Note that the final is comprehensive with about 40% on chapters 1-7 and 60% on the remaining chapters 8, 11 and 13.

You are strongly advised to practice such problem solving by attempting the problem sets in the course pack and the problems at the end of each chapter of the text.