My References
Prateek Sangal
Ehrenberg, Ronald G and Smith, Robert Stewart (1994) “ Modern Labor
Economics: Theory and Public Policy”, fifth edition, pg 279-320,
published by Harper Collins, 10 East 53rd street, New York, NY 10022.
Designed for one-semester or one-quarter courses in labor economics
at the undergraduate or graduate level for students who may not have
an extensive economics background. Develops the modern theory of
labor market behavior, summarizes empirical evidence for and against
each hypothesis, and illustrates the usefulness of theory for public
policy. Changes in the current edition include the addition of material
on status-seeking behavior and the problem of the Prisoner's Dilemma;
measuring earnings inequality; immigrant cohort quality changes;
alternative models of strike activity; male/female earnings differences;
the full employment rate of unemployment; temporary shocks and the
persistence of unemployment; rational and adaptive expectations; and
demographic changes and the Phillips Curve. Expands review questions
and provides answers to odd-numbered questions. Identifies and
highlights frequently misunderstood fundamentals of labor economics.
Chapter appendices present advanced material and technical details. A
study guide with sequenced questions for each chapter is also available.
Ehrenberg and Smith are at Cornell University.
Frazis, H. (2002). Human capital, signaling, and the pattern of returns to education. US
Bureau of Labor Statistics, 54, 298-320.
This paper analyzes the implications of the pattern of returns to
education for human capital and signaling models. The US Current
Population Survey shows diploma effects and small returns to the
interval just before college graduation. A human capital model explains
this pattern only under special circumstances unlikely to be stable. A
Spence-type signaling model can explain diploma effects, but not the
low return prior to graduation unless there is substantial measurement
error. I propose an extension of the signaling model where agents are
initially unsure of their ability.
Belfield, C. (200). Economic principles for education: theory and
evidence. Cheltenham, U.K. and Northampton, Mass.:
Elgar, 04, 1-252.
Summarizes and synthesizes economic research on education using
evidence from a range of countries but mostly from the United
Kingdom and the United States. Analyzes education using economic
principles and provides a justification for the subdiscipline of the
economics of education. Addresses the human capital model linking
education and the labor market; the theory of enrollment choice; the
theory of the enterprise; evidence on education enterprises; the factor
inputs of education enterprises and how they may be combined in
appropriate proportions; the theory of the market and how education
may be traded in conventional markets; the role of government in
education; the aggregate effects of education; and how economic theory
and evidence can be used to inform and direct education policy.
Christofides, L. (2002). Self/paid-employment, private sector selection.
Labour Economics, 9, 62-737.
We use Probit models to account for the double selection problem of
choice between, on the one hand, self- and paid-employment and, on
the other, employment in the public and private sector. These models
provide corrections for sample selection in wage equations for paid
employees in the public and private sectors. Using a modified version
of the Oaxaca and Ransom (1994) procedure, we decompose the wage
gap between the public and private sectors into a portion attributable to
differences in characteristics, the public sector advantage, the private
sector disadvantage and unobserved selection effects. Rich data for the
Republic of Cyprus, a thriving economy with institutional features
reminiscent of a developing economy, help determine the choice of
type (self /paid) and sector (public/private) of employment. The human
capital model describes the wage determination process satisfactorily.
The size and distribution of public sector rents between men and
women are similar to those in North America and are bracketed by
results for developing countries.
Wilson, K. (2001). The determinants of educational attainment: modeling and estimating
the human capital model and education production functions. Souther Economic Journal,
67, 51-518.
This paper develops and estimates a theoretical model of an individual's high school graduation
choice. The model incorporates the idea of a utility-maximizing youth responding to the economic
incentives associated with incremental education, as posited by the human capital literature.
However, it also allows for family, neighborhood, and school characteristics to affect the process
of being educated, as posited by the education production function literature. Estimation of the
model, using the Panel Study of Income Dynamics (PSID) supplemented with neighborhood and
school data, indicates that indeed students respond to economic incentives in making education
choices; however, most of the effects of background characteristics are working through the
education process rather than affecting returns to schooling.
Manning, A. (2000). Movin' on up: interpreting the earnings-experience profile. Bulletin
of Economic Research, 52, 95-261.
Human capital theory provides the generally accepted interpretation of the relationship between
earnings and labour market experience, namely that general human capital tends to increase with
experience. However, there are other plausible interpretations. Search models, for example,
generally predict that more time in the labour market increases the chance of finding a better
match and hence tends to be associated with higher earnings. This paper shows how a simple
search model can be used to predict the amount of earnings growth that can be assigned to search
with the residual being assigned to the human capital model. A substantial if not the larger part of
the rise in earnings over the life-cycle in Britain can be explained by a simple search model, and
virtually all the earnings gap between men and women can be explained in this way. Overall, the
evidence suggests that we do need to reinterpret the returns to experience in earnings functions.
Belfield, C. (2000). Economic principles for education: theory and evidence.
Summarizes and synthesizes economic research on education using
evidence from a range of countries but mostly from the United
Kingdom and the United States. Analyzes education using economic
principles and provides a justification for the subdiscipline of the
economics of education. Addresses the human capital model linking
education and the labor market; the theory of enrollment choice; the
theory of the enterprise; evidence on education enterprises; the factor
inputs of education enterprises and how they may be combined in
appropriate proportions; the theory of the market and how education
may be traded in conventional markets; the role of government in
education; the aggregate effects of education; and how economic theory
and evidence can be used to inform and direct education policy.