ECON 463

Economics of the Labor Market

Economics College of Family, Home, and Social Sciences

Course Description

Economic analysis and institutional background of labor markets in developed countries, particularly the United States. Typical topics include labor supply and demand analysis, determination of wages and employment, investment in education, wage differences by gender and race, immigration, and unions.

When Taught

Fall and Winter

Grade Rule

Grade Rule 8: A, B, C, D, E, I (Standard grade rule)










Econ 463 students will be able to

Learning Outcome

Demonstrate an understanding of standard optimization models to set up and solve the labor supply problem facing the individual and the labor demand problem facing the firm and show the important comparative statics results of both models. Students will understand how these models produce the neoclassical market framework and be able to solve problems using that framework. Solve and use other microeconomic optimizing models of agent behavior, such as models of job search, human capital choices, labor supply, and demand in risky occupations, union wage setting, and behavior under alternative compensation schemes. Demonstrate an understanding of the basic institutional structure of the U.S. labor market, including broad trends in labor supply behavior and wages and the institutional details and likely labor market effects of major government programs. Read and discuss high quality empirical research on labor economic topics and explain how these results interrelate to the predictions of formal economic models. Complete an empirical project demonstrating competence in basic econometric techniques. Identify some of the ways in which government policy choices affect labor market outcomes