University of California, Davis
Department of Economics this version: 4 October 2006
Professor Doug Miller
Economics 151A, Fall 2006
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Professor Doug Miller
SSH 1151
752-8490 dlmiller@ucdavis.edu
EC151A
L
ABOR
E
CONOMICS
In this course, we will examine several important topics related to labor markets in the United
States. The main theory covers the economics of labor supply and labor demand. We will also spend considerable time on policy applications such as welfare reform and minimum wage laws.
Overall, the course is designed to cover important questions in labor economics, familiarize you with basic institutional background and statistics, and provide you with economic models important to the evaluation of the policy questions. With this in hand, you should be able to analyze, in an unbiased way, a wide array of important policy questions.
Class Meetings: Tuesdays and Thursdays, 10.30am-11.50am, Wellman 226
Office Hours: Tuesdays and Wednesdays 8:30-10:00am.
Course Prerequisites: The essential pre-requisite for this course is Economics 100 (which in turn requires Mathematics 16A-B or 21A-B).
Section Place/Time: Section 1: SSH 90, Thursdays 7:10-8:00pm
Section 2: SSH 90, Thursdays 8:10-9:00pm
Teaching Assistant: Nick Sanders, SSH 115, njsanders@ucdavis.edu
Office Hours: Mondays and Thursdays, 1-2pm
Textbook:
The required textbook is:
George J. Borjas, Labor Economics, Third Edition (Irwin McGraw-Hill, 2004)
The text is the main source of information for the course.
An optional second reference that covers much of the same material is:
Ronald Ehrenberg and Robert Smith, Modern Labor Economics, Eighth Edition (Addison
Wesley, 2003) Below, I will refer to it as "ES"

Professor Doug Miller
Economics 151A, Fall 2006
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Additional Required Readings:
In addition to the textbook, we will read a few journal articles in selected applied subject areas of the course. These will be distributed through our class web page, or as announced.
Course Grading and Requirements:
15% Problem Sets (4)
35% Midterm Exam Tuesday October 31 st , in class.
50% Final Exam Monday, December 11, 8.00am-10.00am
(Exam code A)
Course Web Site:
The course web page is available at http://my.ucdavis.edu/ You will be able to view and download the syllabus, class information, problem sets and solutions, exams and solutions, and limited lecture notes
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Policies:
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All homework assignments are due and must be handed in during lecture.
Homework assignments will be distributed through the course web site (on my.ucdavis.edu) and are discussed in section.
Homework is graded "check+", "check", and "check-". When determining course grades, the homework is recorded as a 100% for "check+", a 85% for "check", a 75% for "check-
", and 0% if not handed in. There is a significant penalty for NOT handing in the homework.
Some homework assignments will require downloading and analyzing information from the internet. There will not be any computer lab time available. Please contact me if you foresee problems with internet access.
No make-up exams will be provided. Drop the course now if you have conflicts with the final exam time.
Exams are closed book with a mixture of multiple choice, short answer, and multiple part analytical problems. The final is cumulative with a greater weight on material from the second part of the quarter.

R
EADING
L
IST
:
1.
Introduction and Overview (1 lecture)
Introduction and Overview of the Labor Market, Borjas chapter 1
(ES Chs. 1 & 2)
Professor Doug Miller
Economics 151A, Fall 2006
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2.
Labor Supply I: The Decision to Work (3 lectures)
Theory of Labor Supply, Borjas, chapter 2 (pp.21-54).
(ES Ch. 6, pp 163-193)
Application #1
Application #2
Trends in US Labor supply
The relationship between economic development and female labor supply
Kristin Mammen and Christina Paxson, "Women's work and Economic Development,"
The Journal of Economic Perspectives, Vol 14, No. 4 (Autumn 2000). Focus on pp. 141-151.
The rest of the article is good, too!
3.
Application #3: Anti-Poverty Programs and Welfare Reform (2 lectures)
History, Effects on Labor Supply, Empirical Estimates, Borjas, chapter2 (pp. 54-64).
(ES pp.195-200)
Bradley Schiller, Chapter 11 “Welfare Programs,” in The Economics of Poverty and
Discrimination , Prentice Hall, Eighth Edition. Read pages 193-212.
Rebecca Blank, “Declining Caseloads/ Increased Work: What Can We Conclude about the
Effects of Welfare Reform?”, Federal Reserve Bank of New York Economic Policy Review ,
September 2001. Check out the whole symposium at: http://www.newyorkfed.org/research/epr/2001n2.html
Or, download the paper directly at: http://www.newyorkfed.org/research/epr/01v07n2/0109blan.pdf
4.
Labor Demand I (3 lectures)
Theory of Labor Demand, Borjas, chapter 4 (pp.104-135)
(ES Ch 3, Appendix 3A, and ch 4, pp. 96-110)).

Professor Doug Miller
Economics 151A, Fall 2006
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5.
Primer on Regression Analysis (1 lecture)
Statistical Testing of Labor Market Hypotheses, Borjas, Ch1 Appendix (pp. 12-20)
(ES Appendix 1A (pp. 15-23)).
6.
Application #4: Effects of Minimum Wage Laws (2 lectures)
History, Effects on Employment, Empirical Estimates, Borjas, Chapter 4, (pp136-146).
(ES Chapter 4 (pp. 110-120)).
David Card and Alan Krueger, Chapter 1 “Introduction and Overview,” in Myth and
Measurement: The New Economics of the Minimum Wage , Princeton University Press, 1995, pp. 1-19.
David Card, “Do Minimum Wages Reduce Employment? A Case Study of California, 1987-
89,” Industrial and Labor Relations Review , Vol 46, No. 1, October 1992, pp. 38-54.
7.
Labor Supply II (2 lectures)
Labor Supply: Household Production, the Family, and the Life Cycle, Borjas, Ch 3
8.
Labor Market Equilibrium (2 lectures)
Borjas, Ch. 5.
9.
Compensating Wage Differentials (2 lectures)
Borjas, Chapter 6.
10.
Unemployment [if time allows]
Borjas, Chapter 13.