Doctoral Course on “Firm-level analysis of labour (and related) issues”
V.Vandenberghe
The aim of the course is show how researchers can gain insight and understanding of many
issues in labour - and related fields of – economics, when analyzing them through the prism of
firms’ decisions and functioning. It is to show how these issues can be relatively easily
evaluated empirically. To this aim, the course will equip research students with the theoretical
background as well as the econometric tools enabling them to carry out top-notch empirical
research, exploiting the growing availability of employer-employee matched longitudinal
micro data.
Tentative table of contents
1) Specifying production and labour cost functions that account for labour
diversity/heterogeneity
- The Hellerstein Neumark (HN) Labour Aggregate Index
- Accounting for varying degrees of substitutability
- Combining production and labour cost function analysis to assess the degree of
alignment of earnings profiles on productivity profiles; plus the economic implications
of (mis)alignment
- HN and TFP growth
2) The literature on the identification of firm-level (production) functions.
- Unobserved heterogeneity: firm and individual heterogeneity and the use of
three/two-way error-components models
- Tackling endogeneity/simultaneity bias using system-GMM (Blundell & Bond,
1998) or proxy-based structural approaches (Olley and Pakes, 1996; Levinsohn and
Petrin; 2003)
3) Topical issues
This section will illustrate how the above framework can be used to address a large range of
issues at the intersection of labour-, industrial- or even growth economics. They comprise the
barriers to employment faced by older individuals or women, the impact of
labour heterogeneity on productivity, the problem of gender wage discrimination, the
productivity gains/losses of resorting to part-time work, the regional labour market
performances and the (non)alignment of labour costs on firm productivity, the firm-level
relationship between human capital, productivity and wages or the role of changing labour
force characteristics (greying and feminization) on the TFP growth.
4) Assignment: redaction of a short essay addressing a labour market (or related) issue, using
the laid out theoretical/methodological framework, applied to micro data (provided by the
instructor).
Reading list/ references
Ackerberg, D.A, Caves, K. and Frazer, G. (2006), Structural Identification of Production
Functions, Department of Economics, Working Paper, UCLA.
Andrews; A., M J., Schank, T., Upward, R., Practical fixed effects estimation methods for the
three-way error components model, Stata Journal 6, 4, pp. 461-481
Blundell, R. and S. Bond (1998), Initial Conditions and Moment Restrictions in Dynamic Panel Data
Models, Journal of Econometrics, 87, pp. 115-143.
Hellerstein. J.; Neumark. D.; Troske. K. (1999). Wages. Productivity and Worker Characteristics:
Evidence from Plant-Level Production Functions and Wage Equations. Journal of Labor Economics.
Vol. 17 (3). pp. 409-446.
Levinsohn. J. and A. Petrin (2003). Estimating production functions using inputs to control for
unobservables, Review of Economic Studies, 70 (2), pp. 317-341.
Olley, G.S, and A. Pakes (1996), ‘The Dynamics of Productivity in the Telecommunications
Equipment Industry’, Econometrica, 64(6), pp. 1263-1297
Syverson, C. (2011), What Determines Productivity?, Journal of Economic Literature, 49(2), pp 326–
365.
van Ours, J.C. and L, Stoeldraijer (2011), ‘Age, Wage and Productivity in Dutch Manufacturing’, De
Economist, 159(2), pp. 113-137.
Vandenberghe, V. (2011) Firm-level Evidence on Gender Wage Discrimination in the Belgian Private
Economy , Labour: Review of Labour Economics and Industrial Relations, 25(3), pp. 330-349
Vandenberghe, V. (2013) Are firms willing to employ a greying and feminizing workforce? , Labour
Economics, 22, pp. 30-46
Vandenberghe, V. Rigo, M. & Waltenberg, F. (2013), Ageing and Employability. Evidence from
Belgian Firm-Level Data, Journal of Productivity Analysis, 40(1), pp. 111-136
Prerequisites :
- Good level of labour economics and microeconometrics,
- And a good knowledge of production function economics
- Experience in using STATA
Evaluation: assessment of the essay
Semester of teaching: 2nd semester year 2015-16 onwards
Timetable : Monday 10.45-12.45 am: 8/02; 15/02; 22/02; 7/03; 28/03; 4/04; 11/04
Format : 7 sessions of 2 hours each