Readings

Readings are also listed by Class Session.

Reading list Part I (PDF)
Reading list Part II (PDF)

Suggested Readings

Books

Buy at Amazon Ashenfelter, Orley, and Richard Layard. The Handbook of Labor Economics. Vol. 1 and 2. New York: North-Holland, 1986; Vol. 3A, 3B, and 3C, 1999. ISBN: 0444878580 (set).

Buy at Amazon (CZ) Cahuc, Pierre, and Andre Zilberberg. Labor Economics. Cambridge, Mass. and London: MIT Press, 2004. ISBN: 026203316X.

Buy at Amazon Laffont, Jean-Jacques, and David Martimort. The Theory of Incentives: The Principal-Agent Model. Princeton, N. J.: Princeton University Press, 2002. ISBN: 0691091846.

Buy at Amazon Pissarides, Christopher. Equilibrium Unemployment Theory. Cambridge, Mass. and London: MIT Press, 2000. ISBN: 0262161877.

Buy at Amazon Lazear, Edward. Personnel Economics. Cambridge, Mass. and London: MIT Press, 1995. ISBN: 0262121883.

Articles

NBER working papers are available from National Bureau of Economic Research.

First Part

Labor Market Statistics and Omitted Variables Bias Review

Angrist, J., and A. Krueger. "Empirical Strategies in Labor Economics." Chapter 23 in The Handbook of Labor Economics. Vol. 3A. pp. 1278-1357. Sections 3-4.

Goldin, C. "Labor Markets in the Twentieth Century." NBER Historical Working Paper No. 58 (June 1994).

Angrist, J. "Everything You Always Wanted to Know About Labor Force Statistics." Mimeo. 1987.

U.S. Department of Labor, Bureau of Labor Statistics. "How the Government Measures Unemployment." BLS Report 505, 1977.

Romer, C. "Spurious Volatility in Historical Unemployment Data." Journal of Political Economy 94, no. 1 (February 1986): 1-37.

Polivka, A. "Data Watch: The Redesigned Current Population Survey." Journal of Economic Perspectives 10, no. 3 (Summer 1996): 169-180. Also, see the CPS web site and technical documentation for latest on post-redesign issues.

Farber, H. "The Changing Face of Job Loss in the United States, 1981-1995." Brookings Papers on Economic Activity: Microeconomics (1997): 55-128.

———. "Job Loss in the United States: 1981-2001." Princeton Industrial Relations Section Working Paper 471 (January 2003).

Freedman, David. "Statistical Models and Shoe Leather." Sociological Methodology 21 (1991): 291-313.

———. "From Association to Causation: Some Remarks on the History of Statistics." Statistical Science 14, no. 3 (August 1999): 243-258.

Holland, Paul. "Statistics and Causal Inference." Journal of the American Statistical Association 81, no. 396 (December 1986): 945-960.

Meyer, Bruce. "Natural and Quasi-experiments in Economics." Journal of Business and Economic Statistics 13 (1995): 151-161. (and on NBER web site).

The Neoclassical Labor Supply Model

Basics

Killingsworth, M. Labor Supply. Cambridge and New York: Cambridge University Press. 1983. Chapters 1, 2, and 7.

Ashenfelter, O. "What is Involuntary Unemployment?" Proceedings of the American Philosophical Society 122, no. 3 (June 1978). (and on NBER website)

Becker, G., and G. Ghez. The Allocation of Time and Goods Over the Life-Cycle. New York: Columbia University Press, 1975.

Abbott, M., and O. Ashenfelter. "Labor Supply, Commodity Demand and the Allocation of Time." Review of Economic Studies 43, no. 3 (October 1976): 389-411.

Ashenfelter, O., and J. Heckman. "The Estimation of Income and Substitution Effects in a Model of Family Labor Supply." Econometrica 42, no. 1 (January 1974): 73-86.

Pencavel, J. "Labor Supply of Men: A Survey." InThe Handbook of Labor Economics. Vol. 1.

Smith, J. "Female Labor Supply." In The Handbook of Labor Economics. Vol. 1.

The Life-Cycle Model

Blundell, R., and T. McCurdy. "Labour Supply: A Review of Alternative Approaches." In Handbook of Labor Economics. Vol. 3A.

Becker, G., and G. Ghez. The Allocation of Time and Goods Over the Life-Cycle. New York: Columbia University Press, 1975.

MaCurdy, T. "An Empirical Model of Labor Supply in a Life-Cycle Setting." Journal of Political Economy 89, no. 6 (December 1981): 1059-1085.

Altonji, J. "Intertemporal Substitution in Labor Supply: Evidence from Micro Data." Journal of Political Economy 94, no. 3, part 2 (June 1986): S176-S215.

Browning, Deaton, and Irish. "A Profitable Approach to Labor Supply and Commodity Demand Over the Life-Cycle." Econometrica 53, no. 3 (May 1985): 503-543.

Ashenfelter, O. "Macroeconomic and Microeconomic Analyses of Labor Supply." Carnegie-Rochester Conference on Public Policy 21 (1984): 117-156.

Angrist, J. "Grouped-Data Estimation and Testing in Simple Labor Supply Models." Journal of Econometrics 47, no. 2 (1991): 243-266.

Card, D. "Intertemporal Labor Supply: An Assessment." In Advances in Econometrics Sixth World Congress. Vol. 2. Edited by C. Sims. Cambridge and New York: Cambridge University Press, 1994, pp. 49-78.

Lucas, R. E., and L. Rapping. "Real Wages, Employment, and Inflation." Journal of Political Economy 77, no. 5 (September-October 1969): 721-764.

Applications

Moffitt, R. "Welfare Programs and Labor Supply." NBER Working Paper No. 9168 (September 2002).

Card, David, and Philip K. Robins. "Do Financial Incentives Encourage Welfare Recipients to Work? Evidence from a Randomized Evaluation of the Self-Sufficiency Project." NBER Working Paper No. 5701 (August 1996).

Eissa, N., and J. Leibman. "Labor Supply Response to the Earned Income Tax Credit." Quarterly Journal of Economics 111 (May 1996): 605-637.

Gelbach, J. "Public Schooling for Young Children and Maternal Labor Supply." American Economic Review 92 (March 2002): 307-322.

Angrist, J., and W. Evans. "Children and their Parents' Labor Supply: Evidence from Exogenous Variation in Family Size." American Economic Review 88, no. 3 (June 1998): 450-477.

Farber, H. "Is Tomorrow Another Day? The Labor Supply of New York City Cab Drivers." Princeton Industrial Relations Section Working Paper, no. 473 (May 2003). [Also available as NBER Working Paper No. w9706 (May 2003).]

Camerer, Colin F., L. Babcock, G. Loewenstein, and R. Thaler. "Labor Supply of New York City Cab Drivers: One Day at a Time." Quarterly Journal of Economics 112 (May 1997): 408-41.

Fehr, Ernst, and Goette Lorenz. "Intertemporal Substitution at Work? Evidence from a Field Experiment." 2002.

Ashenfelter, O. "The Labor Supply Response of Wage Earners." In Welfare in Rural Areas. Edited by Palmer and Pechman. Washington, D.C.: Brookings, 1978, pp. 109-148.

———. "Determining Participation in Income-Tested Social Programs." Journal of the American Statistical Association 78, no. 383 (September 1983): 517-525.

Plant, M. "An Empirical Analysis of Welfare Dependence." American Economic Review 74, no. 4 (September 1984): 673-684.

Blank, R. "Evaluating Welfare Reform in the United States." Journal of Economic Literature (December 2002): 1105-66.

Card, D., and D. Hyslop. "Estimating the Dynamic Treatment Effects of an Earnings Subsidy For Welfare-Leavers." Berkeley Center for Labor Economics Working Paper 47 (March 2002). (This resource may not render correctly in a screen reader.PDF)

Angrist, J. "How Do Sex Ratios Affect Marriage and Labor Markets? Evidence from America's Second Generation." Quarterly Journal of Economics 117, no. 3 (August 2002): 997-301.

Bronars, S., and J. Grogger. "The Economic Consequences of Unwed Motherhood: Using Twins as a Natural Experiment." American Economic Review 84, no. 5 (December 1994): 1141-1156.

Labor Demand, Minimum Wages, and Anomalies

Models of the Demand for Labor

Hamermesh, D. "The Demand for Labor in the Long Run." Chapter 8 in Handbook of Labor Economics. Vol. 1.

———. Labor Demand. Princeton, N.J.: Princeton University Press, 1993. Chapters 2-3, pp. 18-136.

Nickell, S. "Dynamic Models of Labour Demand." Chapter 9 in Handbook of Labor Economics. Vol. 1.

Varian, H. Microeconomic Analysis. 3rd ed. New York: Norton, 1992.

Minimum Wages

Neumark, D., and B. Wascher. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania: Comment." American Economic Review 90, no. 5 (December 2000): 1362-1396.

Card, D., and A. Krueger. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania: Reply." American Economic Review 90, no. 5 (December 2000): 1397-1420.

Baker, M., D. Benjamin, and S. Stanger. "The Highs and Lows of the Minimum Wage Effect: A Time Series-Cross Section Study of the Canadian Law." Journal of Labor Economics 17, no. 2 (April 1999): 318-50.

Card, D., and A. Krueger. Myth and Measurement: The New Economics of the Minimum Wage. Princeton, N.J.: Princeton University Press, 1995.

Dickens, R., S. Machin, and A. Manning. "The Effects of Minimum Wages on Employment: Theory and Evidence From Britain." Journal of Labor Economics 17, no. 1 (January 1999): 1-22.

Kennan, J. "The Elusive Effects of Minimum Wages." Journal of Economic Literature 33, no. 4 (December 1995): 1950-1965.

Lang, K., and S. Kahn. "The Effect of Minimum Wage Laws on the Distribution of Employment: Theory and Evidence." Journal of Public Economics 69, no. 1 (July 1998): 67-82.

Brown, C. "Minimum Wages, Employment, and the Distribution of Income." Chapter 32 in Handbook of Labor Economics. Vol. 3.

Immigration

Card, David. "Immigrant Inflows, Native Outflows, and the Labor Market Impacts of higher Immigration." Journal of Labor Economics 19, no. 1 (2001): 22-64.

———. "The Impact of the Mariel Boatlift on the Miami Labor Market." Industrial and Labor Relations Review 43, no. 2 (1990): 245-257.

Johnson, George E. "The Labor Market Effects of Immigration." Industrial and Labor Relations Review 33, no. 3 (1980): 331-341.

Competitive Labor Market Anomalies

Card, David, and Dean Hyslop. "Does Inflation Grease the Wheels of the Labor Market?" In Reducing Inflation: Motivation and Strategy, edited by Christina D. Romer and David H. Romer. Chicago: University of Chicago Press, 1997.

Bewley, T. Why Wages Don't Fall During a Recession. Cambridge, Mass.: Harvard University Press, 1999. Chapter 8, p. 21.

Burdett, K., and D. T. Mortensen. "Wage Differentials, Employer Size and Unemployment." International Economic Review 39 (1998): 257-273.

Mortensen, D. T. Wage Dispersion: Why Are Similar Workers Paid Differently? Cambridge, Mass.: MIT Press, 2003. Chapters 1-4.

Manning, Alan.Monopsony in Motion: Imperfect Competition in Labor Markets. Princeton, N.J.: Princeton University Press, 2003. Chapters 1-2.

Jacobson, L. S., R. J. Lalonde, and D. G. Sullivan. "Earnings Losses of Displaced Workers." AER 83 (1993): 685-709.

Gibbons, Robert, and Lawrence Katz. "Does Unmeasured Ability Explain Inter-Industry Wage Differentials?" Review of Economic Studies 59, no. 3 (July 1992): 515-535.

Baker, George, Michael Gibbs, and Bengt Holmstrom. "The Internal Economics of the Firm: Evidence from Personnel Data." Quarterly Journal of Economics 109, no. 4 (November 1994): 881-919.

Beaudry, Paul, and John DiNardo. "The Effects of Implicit Contracts on the Behavior of Wages over the Business Cycle." Journal of Political Economy (August 1991): 665-688.

Topel, Robert H., and Michal P. Ward. "Job Mobility and the Careers of Young Men." The Quarterly Journal of Economics (May 1992): 439-79.

DellaVigna, Stefano, and M. Daniele Paserman. "Job Search and Impatience." NBER Working Paper No. 10837 (October 2004). (PDF)

Paserman, Daniele. "Job Search and Hyperbolic Discounting: Structural Estimation and Policy Implications." Manuscript, Hebrew University of Jerusalem, September 2003.

Frank, Robert H., and Robert M. Hutchens. "Wages, Seniority, and the Demand for Rising Consumption Profiles." Journal of Economic Behavior and Organization 21: 251-276.

Human Capital and the Econometrics of Individual Wage Determination

Schooling, Experience, and Earnings

Mincer, J. Schooling, Experience, and Earnings. New York: NBER, 1974.

Becker, G. Human Capital. 3rd ed. Chicago: University of Chicago Press, 1993.

Willis, R. J. "Wage Determinants." Chapter 10 in The Handbook of Labor Economics. Vol. 1.

Willis, R. J. and Sherwin Rosen. "Education and Self-Selection." Journal of Political Economy 87, no. 5, part 2 (Oct 1979): S7-S36.

Freeman, R. "Demand for Education." Chapter 6 in The Handbook of Labor Economics. Vol. 1.

Griliches, Z. "Estimating the Returns to Schooling: Some Econometric Problems." Econometrica 45, no. 1 (January 1977): 1-22.

Griliches, and Mason. "Education, Income and Ability." Journal of Political Economy 80, no. 3, part 2 (May-June 1972): S74-S103.

Angrist, J. D., and A. Krueger. "Does Compulsory Schooling Attendance Affect Schooling and Earnings?" Quarterly Journal of Economics 106, no. 4 (Nov 1991): 979-1014.

Card, D. "Earnings, Schooling, and Ability Revisited." In Research in Labor Economics  14 (1995). Edited by S. Polachek. pp. 23-48.

———. "The Causal Effect of Education on Earnings." In The Handbook of Labor Economics. Vol. 3A.

Freeman, R. "Overinvestment in College Training." Journal of Human Resources 10, no. 3 (Summer 1975): 287-311.

Angrist, J. "Lifetime Earnings and the Vietnam Era Draft Lottery: Evidence from Social Security Administrative Records." American Economic Review 80, no. 3 (June 1990): 313-336.

Card, D., and A. Krueger. "Does School Quality Matter? Returns to Education and the Characteristics of Public Schools in the United States." Journal of Political Economy 100 (February 1992): 1-40.

Altonji, J., and R. Shakotko. "Do Wages Rise with Job Seniority?" Review of Economic Studies (July 1987).

Ben-Porath, Yoram. "The Production of Human Capital Over the Life Cycle.'' Journal of Political Economy 75, no. 4, part 1 (August 1967): 352-365.

Roy, A. "Some Thoughts on the Distribution of Earnings." Oxford Economic Papers (1951): 235-46.

Card, David. "Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems." Econometrica 69, no. 5 (2001): 1127-60. (PDF)

Levhari, David and Yoram Weiss. "The Effect of Risk on the Investment in Human Capital." American Economic Review 64, no. 6 (1974): 950-63.

Liquidity Constraints

Carneiro, Pedro, and James J. Heckman. "The Evidence on Credit Constraints in Post-Secondary Schooling." Economic Journal (October 2002): 705-734.

Cameron, Stephen, and James Heckman. "The Dynamics of Educational Attainment for Black, Hispanic, and White Males." Journal of Political Economy 109, no. 3 (2001): 455-499. (PDF)

Cameron, Stephen, and Christopher Taberk. "Borrowing Constraints and the Returns to Schooling." NBERWorking Paper No. 7761 (2000). (also JPE forthcoming) (PDF)

Kane, Thomas, J. "A Quasi-Experimental Estimate of the Impact of Financial Aid on College-Going." NBER Working Paper No. 9703 (May 2003). (PDF)

Kane, Thomas. "Rising Public College Tuition and College Entry: How Well Do Public Subsidies Promote Access to College?" NBER Working Paper No. 5164 (July 1995). (PDF)

———. "Evaluating the Impact of the D.C. Tuition Assistance Grant Program." Mimeo. 2004.

Dynarski, Susan. "Does Aid Matter? Measuring the Effect of Student Aid on College Attendance and Completion." AER, 2003.

———. "Hope for Whom? Financial Aid for the Middle Class and its Impact on College Attendance." NBER Working Paper No. 7756 (2000). (PDF)

Meghir, Costas, and Marten Palme. "Ability, Parental Background and Education Policy: Empirical Evidence from a Social Experiment." IFS mimeo.

Compulsory Schooling

Oreopoulos, Philip. "Do Dropouts Drop Out Too Soon? International Evidence from Changes in School Leaving Laws." NBER Working Paper No. 10155 (2003). (PDF)

Angrist, J., and D. Acemoglu. "How Large are Human Capital Externalities? Evidence From Compulsory Attendance Laws." NBER Macro Annual 15, 2000.

Lleras-Muney, Adriana. "The Relationship Between Education and Adult Mortality in the United States." NBER Working Paper No. 8986 (2002). (and RESTUD forthcoming) (PDF)

Lochner, Lance, and Enrico Moretti. "The Effect of Education on Crime: Evidence from Prison Inmates, Arrests, and Self-Reports." NBER Working Paper No. 8605 (2001). (and AER) (PDF)

Intergenerational Mobility

Solon, G. "Intergenerational Mobility in the Labor Market." In Handbook of Labor Economics. Vol. 3A.

Case, Anne, Darren Lubotsky, and Christina Paxon. "Economic Status and Health in Childhood: Origins of the Gradient." American Economic Review 92, no. 5 (2002): 1308-34.

Becker, G. and N. Tomes. "Human Capital and the Rise and Fall of Families." Journal of Labor Economics 4, no. 3.2 (1986): S1-S39.

Mulligan, C. "Galton vs. the Human Capital Approach to Inheritance." Journal of Political Economy 107, no. 6.2 (1999): S184-S224.

Solon, G. "Intergenerational Income Mobility in the United States." American Economic Review 82, no. 3 (1992): 393-48.

Haider, Steven, and Gary Solong. "Life Cycle Variation in the Association Between Current and Lifetime Earnings." University of Michigan Mimeo. 2004.

Mazumder, Bhashkar. "Earnings Mobility in the US: A New Look at Intergenerational Inequality." Federal Reserve Bank of Chicago, Working Paper, 2001. (and RESTUD, forthcoming)

Borjas, G. "Ethnic Capital and Intergenerational Mobility." Quarterly Journal of Economics 107, no. 1 (1992): 123-150.

Altonji, J., and T. Dunn. "Relationships Among the Family Incomes and Labor Market Outcomes of Relatives." Research in Labor Economics 12 (1991): 269-310.

Behrman, J., and P. Taubman. "Intergenerational Earnings Mobility in the United States: Some Estimates and a Test of Becker's Intergenerational Endowments Model." Review of Economics and Statistics 67, no. 1 (1985) 144-151.

Goldberger, A. "Economic and Mechanical Models of Intergenerational Transmission." American Economic Review 79, no. 3 (1989) 504-513.

Zimmerman, D. "Regression Toward Mediocrity in Economic Stature." American Economic Review 82, no. 3 (1992): 409-429.

Rosenzweig, M., and K. Wolpin. "Parental and Public Transfers to Young Women and Their Children." American Economic Review 84, no. 5 (1994) 1195-1212.

Oreopoulos, Philip, Marianne Page, and Ann Stevens. "Does Human Capital Transfer from Parent to Child? The Intergenerational Effects of Compulsory Schooling." NBER Working Paper No. 10164. (PDF)

Antonovics, Kate, and Arthur S. Goldberger. "Do Educated Women Make Bad Mothers? Twin Studies of the Intergenerational Transmission of Human Capital." Mimeo. 2003. (PDF)

Behrman, Jere R., and Mark R. Rosenzweig. "Does Increasing Women's Schooling Raise the Schooling of the Next Generation?" American Economic Review 92, no. 1 (March 2002): 323-334.

Behrman, Jere R., Mark R. Rosenzweig, and Paul Taubman. "Endowments and the Allocation of Schooling in the Family and in the Marriage Market: The Twins Experiment." Journal of Political Economy 102, no. 6 (1994): 1131-74.

Bjorklund, A., M. Jantii, O. Raaum, E. Osterback, and T. Eriksson. "Brother Correlations in Earnings in Denmark, Finland, Norway and Sweden Compared to the United States." Journal of Population Economics 15 (2002): 757-772.

Black, Sandra, Paul J. Devereux, and Kjell G. Salanes. "Is Education Inherited? Understanding Intergenerational Transmission of Human Capital." Mimeo. UCLA, 2003. (PDF)

Currie, Janet, and Enrico Moretti. "Mother's Education and the Intergenerational Transmission of Human Capital: Evidence from College Openings and Longitudinal Data." Working Paper, August 2002. (and QJE)

Rosenzweig, Mark R., and Kenneth I. Wolpin. "Are There Increasing Returns to the Intergenerational Production of Human Capital? Maternal Schooling and Child Intellectual Achievement." Journal of Human Resources 29, no. 2 (Spring 1994): 670-693.

Sacerdote, Bruce. "The Nature and Nurture of Economics Outcomes." American Economic Review, American Economic Association 92, no. 2 (May 2002): 344-348.

Oreopoulos, Philip, Marianne Page, and Ann Stevens. "The Intergenerational Effects of Worker Displacement." Mimeo.

Second Part-Acemoglu

Incentives in Organizations

Prendergast, Canice. "The Provision of Incentives in Firms." Journal of Economic Literature 28 (1999): 7-63.

Lazear, Edward. Personnel Economics. Cambridge, Mass. and London: MIT Press, 1996.

Gibbons, Robert. "Incentives and Careers in Organizations." In Advances in Economics and Econometrics: Theory and Applications. Edited by David Kreps, and Ken Wallis. Cambridge: Cambridge University Press, 1997.

Basic Theory of Moral Hazard and Incentives, and Applications to CEO Pay and Unemployment Insurance

CZ Chapter 6.

Salanie, Bernard. The Economics of Contracts: A Primer. Cambridge, Mass. and London: MIT Press, 1997, Chapter 5.

Laffont, Jean-Jacques, and David Martimort. The Theory of Incentives: The Principal-Agent Model. Princeton, N.J.: Princeton University Press, 2002, Chapter 4.

Holmstrom, Bengt. "Moral Hazard and Observability." Bell Journal of Economics 10 (1979): 74-91.

Lazear, Edward. Personnel Economics. Cambridge, Mass. and London: MIT Press, 1996, Chapter 2.

CZ Chapter 11.

———. "Performance Pay and Productivity." American Economic Review 90 (2000): 1346-61.

Murphy, Kevin J. "Corporate Performance and Managerial Remuneration: An Empirical Analysis." Journal of Accounting and Economics 7 (1985):11-42.

Courty, Pascal, and Gerald Marschke. "An Empirical Investigation of Gaming Responses to Explicit Performance Incentives." Journal of Labor Economics 22 (2004): 23-56.

Oyer, Paul. "Fiscal Year Ends and Nonlinear Incentive Contracts: The Effect on Business Seasonality." Quarterly Journal of Economics 113 (1998):149-85.

Alston, Lee, and Robert Higgs. "Contractual Mix in Southern Agriculture since the Civil War: Facts, Hypotheses, and Test." Journal of Economic History 42 (1982): 327-53.

Shavell, Steven, and Laurence Weiss. "The Optimal Payment of Unemployment Benefits over Time." Journal of Political Economy 87 (1979): 1347-62.

Hopenhayn, Hugo, and Juan Pablo Nicolini. "Optimal Unemployment Insurance." Journal of Political Economy 105 (1997): 412-438.

Multitasking and Counter-Productive Incentives

Holmstrom, Bengt, and Milgrom, Paul. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design." Journal of Law, Economics and Organization 7 (1991): 24-52. (Special Issue)

Laffont, Jean-Jacques, and David Martimort. "The Theory of Incentives: The Principal- Agent Model." Princeton, N.J.: Princeton University Press, 2002. Chapter 4.

Baker, J., and George P. "Incentive Contracts and Performance Measurement." Journal of Political Economy 100, no. 3 (1992): 598-614.

Career Concerns

Wilson, James. Bureaucracy: What Government Agencies Do and Why They Do It. New York: Basic Books, 1989.

Holmstrom, Bengt. "Managerial Incentive Problems: A Dynamic Perspective." Review of Economic Studies 66, no. 1 (1999): 169-82.

Dewatripont, Mathias, Ian Jewitt, and Jean Tirole. "The Economics of Career Concerns, Part I: Comparing Information Structures." Review of Economic Studies 66, no. 1 (January 1999): 183-198.

Dixit, Avinash. "Incentives and Organizations in the Public Sector: An Interpretative Review." Journal of Human Resources 37, no. 4 (Fall 2002): 696-727.

Acemoglu, Daron, Michael Kremer, and Atif Mian. "Incentives in Markets, Firms and Governments" NBER Working Paper No. 9802 (2003). (PDF)

Chevalier, Judith, and Glenn Ellison. "Career Concerns of Mutual Fund Managers." Quarterly Journal of Economics 114 (1999): 389-432.

Additional Topic: Wage Dynamics

Harris, Milton, and Bengt Holmstrom. "A Theory of Wage Dynamics." Review of Economic Studies 49 (1982): 315-34.

Thomas, Jonathan, and Thomas Worrall. "Self-Enforcing Wage Contracts." Review of Economic Studies 55, no. 4 (October 1988): 541-553.

Rogerson, William. "Repeated Moral Hazard." Econometrica 53 (1985): 69-76.

Baker, George, Michael Gibbs, and Bengt Holmstrom. "The Wage Policy of a Firm." Quarterly Journal of Economics 109, no. 4 (1994): 921-55.

Beaudry, Paul, and John DiNardo. "The Effect of Implicit Contracts on the Behavior of Wages over the Business Cycle." Journal of Political Economy (August 1991): 665-688.

Holdups and Investments

Williamson, Oliver. Markets and Hierarchies: Analysis and Antitrust Implications. New York: The Free Press, 1975.

Laffont, Jean-Jacques, and David Martimort. The Theory of Incentives: The Principal- Agent Model. Princeton, N.J.: Princeton University Press, 2002. Chapter 6.

Grout, Paul. "Investment and Wages in the Absence of Binding Contracts: A Nash Bargaining Approach." Econometrica 52 (1984): 449-460.

Grossman, Sanford, and Oliver Hart. "The Costs and Benefits of Ownership: a Theory of Vertical and Lateral Integration." Journal of Political Economy 94 (1986): 691-719.

Hart, Oliver, and John H. Moore. "Property Rights and the Nature of the Firm." Journal of Political Economy 98 (1990): 1119-58.

Efficiency Wages, Unemployment and Organization of the Firm

Shapiro, Carl, and Joseph Stiglitz. "Equilibrium Unemployment as Worker Discipline Device." American Economic Review 74 (1984): 433-444.

Bulow, Jeremy, and Lawrence Summers. "A Theory of Dual Labor Markets with Application to Industrial Policy, Discrimination and Keynesian Unemployment." Journal of Labor Economics 4 (1986): 376-415.

Acemoglu, Daron and Andrew Newman. "The Labor Market and Corporate Structure." European Economic Review 46 (December 2002): 1733-1756.

Lazear, Edward. Personnel Economics. Cambridge, Mass. and London: MIT Press, 1996. Chapter 3.

Fehr, Ernst, and Simon Gachter. "Fairness and Retaliation: The Economics of Reciprocity." Journal of Economic Perspectives 14, no. 3 (2000): 159-81.

Akerlof, George A. "Labor Contracts as Partial Gift Exchange." Quarterly Journal of Economics 97, no. 4 (1982): 543-569.

Fehr, Ernst, and Simon Gachter. "Do Incentive Contracts Crowd Out Voluntary Cooperation?" University of Zurich Mimeo. April 2002.

Campbell III, Carl M., and Kunal S. Kamlani. "The Reasons for Wage Rigidity: Evidence from a Survey of Firms." Quarterly Journal of Economics 112, no. 3 (1997): 759-789.

Neil, Derek. "Supervision and Wages Across Industries." Review of Economics and Statistics 75 (August 1993): 409-17.

Krueger, Alan B. "Ownership, Agency and Wages: An Examination of Franchising in the Fast Food Industry." Quarterly Journal of Economics 106, no. 1 (1991): 75-101.

Cappelli, Peter and Keith Chauvin. "An Interplant Test of the Efficiency Wage Hypothesis." Quarterly Journal of Economics 106, no. 3 (1991): 769-787.

Krueger, Alan B, and Lawrence H. Summers. "Efficiency Wages and the Inter-Industry Wage Structure." Econometrica 56, no. 2 (1988): 259-93.

Search Models of the Labor Market

Pissarides, Christopher. Equilibrium Unemployment Theory. Cambridge, Mass. and London: MIT Press, 2000.

Rogerson, Richard, Robert Shimer, and Randall Wright. "Search-Theoretic Models of the Labor Market: A Survey." NBER Working Paper No. 10655, July 2004.

Partial Equilibrium

Rogerson, op. cit.

The Basic Search Framework

Pissarides, Chapters 1, 2, and 8.

Hosios, Arthur. "On the Efficiency of Matching and Related Models of Search and Unemployment." Review of Economics Studies 57, no. 2 (1990): 279-98.

Blanchard, Olivier and Peter Diamond. "The Beveridge Curve." Brookings Papers on Economics Activity 1 (1989): 1-60.

Mortensen, Dale and Christopher Pissarides. "Job Creation and Job Destruction in the Theory of Unemployment." Review of Economic Studies 61 (1994): 397-416.

Additional Material: Wage Dispersion and Composition of Jobs

Burdett, K., and D. T. Mortensen. "Wage Differentials, Employer Size and Unemployment." International Economic Review 39 (1998): 257-273.

Acemoglu, Daron. "Good Jobs vs Bad Jobs." Journal of Labor Economics 19 (January 2001): 1-22.

Acemoglu, Daron, and Robert Shimer. "Wage and Technology Dispersion." Review of Economic Studies 67 (October 2000): 585-608.

Additional Material: Risk Aversion and Insurance

Acemoglu, Daron, and Robert Shimer. "Efficient Unemployment Insurance." Journal of Political Economy 107 (October 1999): 893-928.

Werning, Ivan. Optimal Unemployment Insurance with Unobservable Savings. MIT mimeo, 2003.

Shimer, Robert, and Ivan Werning. Optimal Unemployment Insurance with Sequential Search. MIT mimeo, 2004. (PDF)

Investments in Skills

Becker, Gary. Human Capital. The University of Chicago Press, 1964.

Human Capital Over the Life Cycle

Ben-Porath, Yoram. "The Production of Human Capital Over the Life Cycle.'' Journal of Political Economy 75, no. 4-1 (1967): 352-365.

Becker, Gary, and Nigel Tomes. "Human capital and the rise and fall of families." Journal of Labor Economics 4 (1986): S1-S39.

Solon, Gary. "Intergenerational Income Mobility in the United States." American Economic Review 82, no. 3 (June 1992): 393-408.

Zimmerman, David J. "Regression toward Mediocrity in Economic Stature." American Economic Review82, no. 3 (June 1992): 409-29.

Casey, Mulligan. Parental Priorities, and Economic Inequality. University of Chicago Press, 1997.

Investments and Market Transactions

Acemoglu, Daron. "A Microfoundation for Social Increasing Returns in Human Capital Accumulation." Quarterly Journal of Economics 111, no. 3 (1996): 779-804.

Theories of Training

Acemoglu, Daron. "Training and Innovation in An Imperfect Labor Market." Review of Economic Studies 64 (1997): 445-464.

Acemoglu, Daron, and Steve Pischke. "Why Do Firms Train." Quarterly Journal of Economics 113, no. 1 (1998): 79-119.

———. "The Structure of Wages and Investment in General Training." Journal of Political Economy 107 (June 1999): 539-572.

Autor, David H. "Why do Temporary Help Firms Provide Free General Skills Training?" Quarterly Journal of Economics 116, no. 4 (2001): 1409-1448.

Acemoglu, Daron, and Steve Pischke. "Beyond Becker: Training in Imperfect Labor Markets." Economic Journal 109 (February 1999): F112-142.

———. "Minimum Wages and on-the-Job Training." Research in Labor Economics (2000).

Firm-Specific Capital

Robert, Topel. "Specific Capital, Mobility, and Wages: Wages Rise with Job Seniority." Journal of Political Economy 99, no. 1 (February 1991): 145-76.

Neal, Derek. "Industry-Specific Human Capital: Evidence From Displaced Workers." Journal of Labor Economics 13 (October 1995): 653-77.

Altonji, Joe, and R. Shakotko. "Do Wages Rise With Seniority?" Review of Economies Studies 54 (1987): 437-459.

Abraham, Katherine, and Henry Farber. "Job Duration, Seniority, and Earnings." American Economic Review 77 (1987): 278-297.

Jovanovic, Boyan. "Job Matching and the Theory of Turnover." Journal of Political Economy (1979): 972-990.

———. "Firm Specific Capital and Turnover." Journal of Political Economy (1979): 1246-1260.

Lazear, Edward. "Firm-Specific Human Capital: A Skill Weights Approach." NBER Working Paper, no. 9679 (May 2003).

Robert, Topel, and Michael Ward. "Job Mobility and the Careers of Young Men." Quarterly Journal of Economics 107, no. 2 (May 1992): 439-479.

Prendergast, Canice. "The Role of Promotion in Inducing Specific Human Capital Acquisition." Quarterly Journal of Economics 108, no. 2 (1993): 523-534.

Charmichael, Lorne. "Firm-Specific Capital and Promotion Ladders." Bell Journal of Economics 14, no. 1 (1983): 251-258.

Lazear, Edward P. Personnel Economics. Cambridge: MIT Press, 1995, Chapter 7.

Technology and The Labor Market

Acemoglu, Daron. "Technical Change, Inequality and the Labor Market." Journal of Economic Literature 40 (March 2002): 7-72.

Basic Patterns and Relative-Supply-Demand Framework

Katz, Lawrence F., and David H. Autor. "Changes in the Wage Structure and Earnings Inequality." In Handbook of Labor Economics. Edited by Orley Ashtenfelter and David Card. Vol. 3A. Amsterdam: North-Holland, 1999.

Katz, Lawrence F., and Kevin M. Murphy. "Changes in Relative Wages, 1963-1987: Supply and Demand Factors." Quarterly Journal of Economics 107 (1995): 35-78.

Autor, David H., Lawrence F. Katz, and Alan B. Krueger. "Computing Inequality: Have Computers Changed The Labor Market." Quarterly Journal of Economics 113, no. 4 (1998): 1169-1213.

Juhn, Chinhui, Kevin M. Murphy, and Brooks Pierce. "Wage Inequality and the Rise in Returns to Skill." Journal of Political Economy 101, no. 3 (1993): 410-442.

Goldin, Claudia, and Lawrence Katz. "The Returns to Skill in the United States Across the Twentieth Century." NBER Working Paper No. 7126 (May 2000). (PDF)

Theories of Skill-Biased Technical Change and Returns to Skills

CZ, Chapter 10.

Berman, Eli, John Bound, and Zvi Griliches. "Changes in the Demand for Skilled Labor within U. S. Manufacturing: Evidence from the Annual Survey of Manufacturing." Quarterly Journal of Economics 109, no. 2 (1994): 367-397.

Berman, Eli, John Bound, and Stephen Machin. "Implications of Skill-Biased Technological Change: International Evidence." Quarterly Journal of Economics 113 (1998): 1245-1280.

Machin, Stephen, John Van Reenen. "Technology and Changes in Skill Structure: Evidence from Seven OECD Countries." Quarterly Journal of Economics 113, no. 4 (November 1998): 1215-44.

Goldin, Claudia, and Lawrence Katz. "The Origins of Technology-Skill Complementarity.'' Quarterly Journal of Economics (August 1998): 693-732.

Krusell, Per, Lee Ohanian, Victor Rios-Rull, and Giovanni Violante. "Capital-Skill Complementarity and Inequality.'' Econometrica 68, no. 5 (2000): 1029-1053.

Krueger, Alan. "How Computers Have Changed the Wage Structure: Evidence from Microdata." Quarterly Journal of Economics 108 (1993): 33-60.

Greenwood, Jeremy, and Mehmet Yorukoglu. "1974." Carnegie-Rochester Conference Series on Public Policy XLVI (1997): 49-95.

Acemoglu, Daron. "Why do New Technologies Complement Skills: Directed Technical Change and Wage Inequality." Quarterly Journal of Economics 113, no. 4 (1998): 1055-1089.

Doms, Mark, Timothy Dunne, and Kenneth Torske. "Workers, Wages and Technology.'' Quarterly Journal of Economics 112 (1997): 253-290.

Caselli, Francesco. "Technological Revolutions.'' American Economic Review 89 (1999): 78-102.

Galor, Oded, and Daniel Tsiddon. "Technological Progress, Mobility and Economic Growth.'' American Economic Review 87 (1996): 363-382.

Galor, Oded, and Omer Maov. "Ability Biased Technological Transition, Wage Inequality and Economic Growth.'' Quarterly Journal of Economics 115 (2000): 469-497.

Changes in the Composition of Jobs, Organizational Change, Superstars, and Hierarchies

Acemoglu, Daron. "Changes in Unemployment and Wage Inequality: An Alternative Theory and Some Evidence." American Economic Review 89, no. 1999a (1998): 1259-1278.

Neal, Derek, and Sherwin Rosen. "Theories of Labor Earnings." In Handbook of Income Distribution. Edited by A. B. Atkinson, and F. Bourguignon. North Holland, 2000.

Autor, David, Frank Levy, and Richard Murnane. "The Skill Content of Recent Technological Change: An Empirical Exploration." NBER Working Paper No. 8337 (June 2001).

Ichniowski, Casey, Katherine Shaw, and G. Prennushi. "The Effects of Human Resource Management Practices on Productivity: A Study of Steel Finishing Lines." American Economic Review 87, no. 3 (1997): 291-313.

Caroli, Eve, and John Van Reenen. "Skill-Biased Organizational Change: Evidence from a Panel of British and French Establishments." Quarterly Journal of Economics 116 (November 2001): 1449-1492.

Bresnahan, Timothy F., Erik Brynjolfsson, and Lorin M. Hitt. "Information Technology, Workplace Organization and the Demand for Skilled Labor: Firm-level Evidence." Quarterly Journal of Economics 117 (2002): 339-376.

Thesmar, David, and Mathias Thoenig. "Creative Destruction and Firm Organization Choice: A New Look into the Growth-Inequality Relationship." Quarterly Journal of Economics 115 (2000): 1201-1237.

Kremer, Michael, and Eric Maskin. Segregation By Skill and the Rise in Inequality. MIT and Harvard Mimeo, 1999.

Rosen, Sherwin. "The Economics of Superstars." American Economic Review 71 (1981): 845-858.

Becker, Gary S., and Kevin M. Murphy. "The Division of Labor, Coordination Costs and Knowledge." Quarterly Journal of Economics 107, no. (1992): 1137-1160.

Garicano, Luis. "Hierarchies and the Organization of Knowledge and Production." Journal of Political Economy 108 (2000): 874-905.

Saint-Paul, Gilles. "On the Distribution of Income and Worker Assignment under Intrafirm Spillovers, with an Application to Ideas and Networks." Journal of Political Economy 109 (2001): 1-37.

Second Part-Autor

Skills Training, Holdups, and Specific Capital Investment

Theories of the Provision and Payment of Training

Grout, Paul. "Investment and Wages in the Absence of Binding Contracts: A Nash Bargaining Approach." Econometrica 52 (1984): 449-460.

Gibbons, Robert, and Lawrence F. Katz. "Layoffs and Lemons." Journal of Labor Economics 9, no. 4 (1991): 351-380.

Greenwald, Bruce C. "Adverse Selection in the Labor Market." Review of Economic Studies 53 (1986): 325-347.

Acemoglu, Daron, and Steve Pischke. "The Structure of Wages and Investment in General Training." Journal of Political Economy 107, no. 3 (June 1999): 539-572.

———. "Why Do Firms Train? Theory and Evidence." Quarterly Journal of Economics 113, no. 1 (February 1998): 79-119.

———. "Beyond Becker: Training in Imperfect Labor Markets." Economic Journal 109 (February 1999): F112-142.

Autor, David H. "Why do Temporary Help Firms Provide Free General Skills Training?" Quarterly Journal of Economics 116, no. 3 (2001): 1409-1448.

Firm Specific Capital

Lazear, Edward. "Firm-Specific Human Capital: A Skill Weights Approach." NBER Working Paper No. 9679 (May 2003).

Prendergast, Canice. "The Role of Promotion in Inducing Specific Human Capital Acquisition." Quarterly Journal of Economics 108, no. 2 (May 1993): 523-534.

Jacobson, Louise S., Robert Lalonde, and Daniel G. Sullivan. "Earnings Losses of Displaced Workers." American Economic Review 83, no. 4 (1993): 685-709.

Altonji, Joe, and R. Shakotko. "Do Wages Rise With Seniority?" Review of Economic Studies 54 (1987): 437-459.

Robert, Topel. "Specific Capital, Mobility, and Wages: Wages Rise with Job Seniority." Journal of Political Economy 99, no. 1 (February 1991): 145-76.

Robert, Topel, and Michael Ward. "Job Mobility and the Careers of Young Men." Quarterly Journal of Economics 107, no. 2 (May 1992): 439-479.

Abraham, Katherine, and Henry Farber. "Job Duration, Seniority, and Earnings." American Economic Review (1986): 278-297.

Incentives, Effort and Monitoring

Efficiency Wage Theory

Shapiro, Carl, and Joseph E. Stiglitz. "Equilibrium Unemployment as a Worker Discipline Device." American Economic Review 74, no. 3 (1984): 433-444.

Kahneman, Daniel, Jack L. Knetsch, and Richard Thaler. "Fairness as a Constraint on Profit-Seeking: Entitlements in the Market." American Economic Review 76, no. 4 (1986): 728-41.

Fehr, Ernst, and Simon Gachter. "Fairness and Retaliation: The Economics of Reciprocity." Journal of Economic Perspectives 14, no. 3 (2000): 159-81.

Akerlof, George A. "Labor Contracts as Partial Gift Exchange." Quarterly Journal of Economics 97, no. 4 (1982): 543-569.

MacLeod, W. Bentley, and James Malcolmson. "Motivation and Markets." American Economic Review 88, no. 3 (1998): 388-411.

Efficiency Wage Evidence

Campbell III, Carl M., and Kunal S. Kamlani. "The Reasons for Wage Rigidity: Evidence from a Survey of Firms." Quarterly Journal of Economics 112, no. 3 (1997): 759-789.

Krueger, Alan B. "Ownership, Agency and Wages: An Examination of Franchising in the Fast Food Industry." Quarterly Journal of Economics 106, no. 1 (1991): 75.

Cappelli, Peter, and Keith Chauvin. "An Interplant Test of the Efficiency Wage Hypothesis." Quarterly Journal of Economics 106, no. 3 (August 1991): 769-787.

Fehr, Ernst, and Simon Gachter. "Do Incentive Contracts Crowd Out Voluntary Cooperation?" University of Zurich mimeo, April 2002. (PDF)

Holzer, Harry J, Lawrence F. Katz, and Alan B. Krueger. "Job Queues and Wages." Quarterly Journal of Economics 106, no. 3 (1991): 739-68.

Krueger, Alan B, and Lawrence H. Summers. "Efficiency Wages and the Inter-Industry Wage Structure." Econometrica 56, no. 2 (1988): 259-93.

Ichino, Andrea, and Regina T. Riphahn. "The Effect of Employment Protection on Worker Effort - A Comparison of Absenteeism During and After Probation." European University Institute Mimeo. October 2001.

Baker, George, Michael Gibbs, and Bengt Holmstrom. "The Wage Policy of a Firm." Quarterly Journal of Economics 109, no. 4 (1994): 921-955.

Bewley, Truman. Why Wages Don't Fall During a Recession. Cambridge: Harvard University Press, 2000.

Katz, Lawrence. "Efficiency Wage Theories: A Partial Evaluation." NBER Macroeconomics Annual, NBER and MIT Press, 1986.

Measurement, Monitoring, and Risk (Time Permitting)

Prendergast, Canice. "The Provision of Incentives in Firms." Journal of Economic Literature 37 (March 1999): 7-63.

Gibbons, Robert. "Incentives in Organizations." Journal of Economic Perspectives 12, no. 4 (1998): 115-132.

Baker, George P. "Incentive Contracts and Performance Measurement." Journal of Political Economy 100, no. 3 (1991): 598-614.

Prendergast, C. "The Tenuous Tradeoff between Risk and Incentives." Journal of Political Economy 110, no. 5 (2002): 1071-1102.

Lazear, Edward P. "Pay, Performance and Productivity." American Economic Review 90, no. 5 (2000): 1346-1361.

Baker, George, and Thomas N. Hubbard. "Make Versus Buy in Trucking: Asset Ownership, Job Design, and Information." American Economic Review 93, no. 3 (2003): 551-572.

Information in Labor Markets: Self-Selection, Signaling and Discrimination

Self Selection

Roy, D. A. "Some Thoughts on the Distribution of Earnings." Oxford Economic Papers 3, no. 2 (1951): 235-46.

Borjas, George. "Self-Selection and the Earnings of Immigrants." American Economic Review 77, no. 4 (1987): 531-53.

Heckman, J., and B. Honore. "The Empirical Content of the Roy Model." Econometrica 58, no. 5 (1990): 1121-49.

Salop, Joanne, and Steven Salop. "Self-Selection and Turnover in the Labor Market." Quarterly Journal of Economics 90, no. 4 (November 1976): 619-627.

Market Signaling

Weiss, Andrew. "Human Capital and Sorting Models." Journal of Economic Perspectives 9, no. 4 (Autumn 1995): 133-154.

Spence, Michael. "Job Market Signaling." Quarterly Journal of Economics 87, no. 3 (August 1973): 355-374.

Tyler, John, Richard J. Murnane, and John Willett. "Estimating the Labor Market Signaling Value of the GED." Quarterly Journal of Economics 115, no. 2 (May 2002): 431-468.

Lang, Kevin, and David Kropp. "Human Capital Versus Sorting: The Effects of Compulsory Attendance Laws." Quarterly Journal of Economics 101 (1986): 609-624.

Bedard, Kelly. "Human Capital Versus Signaling Models: University Access and High School Dropouts." Journal of Political Economy 109, no. 4 (2001): (749-775).

Labor Market Discrimination: Theory

Arrow, Kenneth. "The Theory of Discrimination." In Discrimination in Labor Markets. Edited by Ashenfelter and Rees. Princeton, N.J.: Princeton University Press, 1973.

Becker, Gary. The Economics of Discrimination. 2nd ed. Chicago: University of Chicago Press, 1971.

Aigner, and Cain. "Statistical Theories of Discrimination in Labor Markets." Industrial and Labor Relations Review 30, no. 2 (1977): 175-187.

Phelps, Edmund. "The Statistical Theory of Racism and Sexism." American Economic Review 62, no. 4 (1972): 533-539.

Altonji, Joseph, and Rebecca Blank. "Race and Gender in the Labor Market." In Handbook of Labor Economics. Vol. 3C.

Labor Market Discrimination: Evidence

Goldin, Claudia, and C. Rouse. "Orchestrating Impartiality: The Impact of Blind Auditions on the Sex Composition of Orchestras." American Economic Review 90, no. 4 (2000): 715-41.

Fershtman, Chaim, and Uri Gneezy. "Discrimination in a Segmented Society." Quarterly Journal of Economics 116, no. 1 (2001): 351-377.

Bertrand, Marianne, and Sendhil Mullainathan. "Are Emily and Brendan More Employable than Latoya and Tyrone? A Field Experiment on Labor Market Discrimination." NBER Working Paper No. 9873 (July 2003).

Neal, Derek A., and William R. Johnson. "The Role of Premarket Factors in Black-White Wage Differences." Journal of Political Economy 104, no. 5 (1996): 869-895.

Holzer, Harry J., and Keith R. Ihlanfeldt. "Customer Discrimination and Employment Outcomes for Minority Workers." Quarterly Journal of Economics 113, no. 3 (1998): 835-867.

Various Authors. "Symposium: Discrimination in Product, Credit and Labor Markets." Journal of Economic Perspectives 12, no. 2 (Spring 1998): 23-126. (See especially articles by Yinger, Darity and Mason, Arrow, Heckman, and Loury.)

Hamermesh, Daniel, and Jeff Biddle. "Beauty and the Labor Market." American Economic Review 84, no. 5 (1994): 1174-1194.

Learning and Statistical Discrimination

Farber, Henry, and Robert Gibbons. "Learning and Wage Dynamics." Quarterly Journal of Economics 111, no. 4 (1996): 1007-1047.

Altonji, Joseph, and Charles Pierret. "Employer Learning and Statistical Discrimination." Quarterly Journal of Economics 116, no. 1 (2001): 313-350.

Civil Rights Legislation and the Black/White Wage Gap

Heckman, James, and John Donohue. "Continuous Versus Episodic Change: The Impact of Affirmative Action and Civil Rights Policy on the Economic Status of Blacks." Journal of Economic Literature 29, no. 4 (1991): 1603-1643.

Chay, Kenneth Y. "The Impact of Federal Civil Rights Policy on Black Economic Progress: Evidence from the Equal Employment Opportunity Act of 1972." Industrial and Labor Relations Review 51, no. 4 (July 1998): 608-632.

John J. Donohue III, and Peter Siegelman. "The Changing Nature of Employment Discrimination Litigation." Stanford Law Review, no. 43 (1991): 983-1033.

Economics of Immigration

Theory

Borjas, G. "The Economic Analysis of Immigration." In Handbook of Labor Economics. Vol. 3A. (also has an excellent treatment of the Roy Model).

———. "The Economics of Immigration." Journal of Economic Literature 32, no. 4 (1994): 1667-1717.

———."The Economic Benefits from Immigration." Journal of Economic Perspectives 9, no. 2 (1995): 3-22.

Impacts on Earnings and Employment of Natives

Card, David. "The Impact of the Mariel Boatlift on the Miami Labor Market." Industrial and Labor Relations Review 43, no. 2 (1990): 245-257.

Friedberg, Rachel. "The Impact of Mass Migration on the Israeli Labor Market." Quarterly Journal of Economics 117, no. 4 (2001): 1373-1408.

Borjas, G. "The Labor Demand Curve is Downward Sloping?" Quarterly Journal of Economics 116, no. 4 (2003). (forthcoming.)

Friedberg, Rachel, and Jennifer Hunt. "The Impact of Immigrants on Host Country Wages, Employment, and Growth." Journal of Economic Perspectives 9, no. 2 (1995): 23-44.

Friedberg, Rachel. "You Can't Take it with You? Immigrant Assimilation and the Portability of Human Capital." Journal of Labor Economics 18, no. 2 (2000): 221-251.

Altonji, Joseph, and David Card. "The Effects of Immigration on the Labor Market Outcomes of Less-skilled Natives." In Immigration, Trade and the Labor Market. Edited by Abowd, J., and R. Freeman. Chicago: University of Chicago Press, 1991.

Borjas, George J., Richard B. Freeman, and Lawrence F. Katz. "How Much Do Immigrant and Trade Affect Labor Market Outcomes?" Brookings Papers on Economic Activity, no. 1 (1997).

Readings by Class Session

First Part of the Course

LEC # TOPICS READINGS
First Part - Prof. Oreopoulos
1 Labor Market Statistics and Omitted Variables Bias Review Angrist, J., and A. Krueger. "Empirical Strategies in Labor Economics." Chapter 23 in The Handbook of Labor Economics. Vol. 3A. Sections 3 and 4, pp. 1278-1357.

Goldin, C. "Labor Markets in the Twentieth Century." NBER Historical Working Paper 58 (June 1994). [Also in Cambridge Economic History of the US, 1-85].

Angrist, J. "Everything You Always Wanted to Know About Labor Force Statistics." Mimeo (1987).

U.S. Department of Labor, Bureau of Labor Statistics. How the Government Measures Unemployment. BLS Report 505, 1977.

Romer, C. "Spurious Volatility in Historical Unemployment Data." Journal of Political Economy 94, no. 1 (February 1986): 1-37.

Polivka, A. "Data Watch: The Redesigned Current Population Survey." Journal of Economic Perspectives 10, no. 3 (Summer 1996): 169-180. [Also, see the CPS web site and technical documentation for latest on post-redesign issues.]

Farber, H. "The Changing Face of Job Loss in the United States, 1981-1995." In Brookings Papers on Economic Activity: Microeconomics. 1997, pp. 55-128.

———. "Job Loss in the United States: 1981-2001." Princeton Industrial Relations Section Working Paper 471 (January 2003).

Freedman, David. "Statistical Models and Shoe Leather." Sociological Methodology 21 (1991): 291-313.

———. "From Association to Causation: Some Remarks on the History of Statistics." Statistical Science 14, no. 3 (August 1999): 243-258.

Holland, Paul. "Statistics and Causal Inference." Journal of the American Statistical Association 81, no. 396 (December 1986): 945-960.

Meyer, Bruce. "Natural and Quasi-experiments in Economics." Journal of Business and Economic Statistics13 (1995): 151-161. [and on NBER web site]
2 The Neoclassical Labor Supply Model

Basics

The Life-Cycle Model

Applications
Basics

Killingsworth, M. Chapters 1, 2, and 7 in Labor Supply. Cambridge and New York: Cambridge University Press, 1983.

Ashenfelter, O. "What is Involuntary Unemployment?" Proceedings of the American Philosophical Society 122, no. 3 (June 1978). [and on NBER website]

Becker, G., and G. Ghez. The Allocation of Time and Goods Over the Life-Cycle. New York: Columbia University Press, 1975.

Abbott, M., and O. Ashenfelter. "Labor Supply, Commodity Demand and the Allocation of Time." Review of Economic Studies 43, no. 3 (October 1976): 389-411.

Ashenfelter, O., and J. Heckman. "The Estimation of Income and Substitution Effects in a Model of Family Labor Supply." Econometrica 42, no. 1 (January 1974): 73-86.

Pencavel, J. "Labor Supply of Men: A Survey." In The Handbook of Labor Economics. Vol. I.

Smith, J. "Female Labor Supply." In The Handbook of Labor Economics. Vol. 1.

The Life-Cycle Model

Blundell, R., and T. McCurdy. "Labour Supply: A Review of Alternative Approaches." In Handbook of Labour Economics. Vol. 3A.

Becker, G., and G. Ghez. The Allocation of Time and Goods Over the Life-Cycle. New York: Columbia University Press, 1975.

MaCurdy, T. "An Empirical Model of Labor Supply in a Life-Cycle Setting." Journal of Political Economy 89, no. 6 (December 1981): 1059-1085.

Altonji, J. "Intertemporal Substitution in Labor Supply: Evidence from Micro Data." Journal of Political Economy 94, no. 3, Part 2 (June 1986): S176-S215.

Browning, Deaton, and Irish. "A Profitable Approach to Labor Supply and Commodity Demand Over the Life-Cycle." Econometrica 53, no. 3 (May 1985): 503-543.

Ashenfelter, O. "Macroeconomic and Microeconomic Analyses of Labor Supply." Carnegie-Rochester Conference on Public Policy 21 (1984): 117-156.

Angrist, J. "Grouped-Data Estimation and Testing in Simple Labor Supply Models." Journal of Econometrics 47, no. 2 (1991): 243-266.

Card, D. "Intertemporal Labor Supply: An Assessment." In Advances in Econometrics Sixth World Congress. Vol. 2. Edited by C. Sims. Cambridge and New York: Cambridge University Press, 1994, pp. 49-78.

Lucas, R. E., and L. Rapping. "Real Wages, Employment, and Inflation." Journal of Political Economy 77, no. 5 (September-October 1969): 721-764.

Applications

Moffitt, R. "Welfare Programs and Labor Supply." NBER Working Paper No. 9168 (September 2002).

Card, David, and Philip K. Robins. "Do Financial Incentives Encourage Welfare Recipients to Work? Evidence from a Randomized Evaluation of the Self-Sufficiency Project." NBER Working Paper No. 5701 (August, 1996).

Eissa, N., and J. Leibman. "Labor Supply Response to the Earned Income Tax Credit." Quarterly Journal of Economics 111 (May 1996): 605-637.

Gelbach, J. "Public Schooling for Young Children and Maternal Labor Supply." American Economic Review 92 (March 2002): 307-322.

Angrist, J., and W. Evans. "Children and their Parents' Labor Supply: Evidence from Exogenous Variation in Family Size." American Economic Review 88, no. 3 (June 1998): 450-477.

Farber, H. "Is Tomorrow Another Day? The Labor Supply of New York City Cab Drivers." Princeton Industrial Relations Section Working Paper 473 (May 2003). [Also available as NBER Working Paper No. w9706, May 2003.]

Camerer, Colin F., L. Babcock, G. Loewenstein, and R. Thaler. "Labor Supply of New York City Cab Drivers: One Day at a Time." Quarterly Journal of Economics 112 (May 1997): 408-41.

Fehr, Ernst, and Goette Lorenz. "Intertemporal Substitution at Work? Evidence from a Field Experiment." 2002. (PDF)

Ashenfelter, O. "The Labor Supply Response of Wage Earners." In Welfare in Rural Areas. Edited by Palmer and Pechman. Washington, D. C.: Brookings, 1978, pp. 109-148.

———. "Determining Participation in Income-Tested Social Programs." Journal of the American Statistical Association 78, no. 383 (September 1983): 517-525.

Plant, M. "An Empirical Analysis of Welfare Dependence." American Economic Review 74, no. 4 (September 1984): 673-684.

Blank, R. "Evaluating Welfare Reform in the United States." Journal of Economic Literature (December 2002): 1105-66.

Card, D., and D. Hyslop. "Estimating the Dynamic Treatment Effects of an Earnings Subsidy For Welfare-Leavers." Berkeley Center for Labor Economics Working Paper 47 (March 2002). (PDF)

Angrist, J. "How Do Sex Ratios Affect Marriage and Labor Markets? Evidence from America’s Second Generation." Quarterly Journal of Economics 117, no. 3 (August 2002): 997-301.

Bronars, S., and J. Grogger. "The Economic Consequences of Unwed Motherhood: Using Twins as a Natural Experiment." American Economic Review 84, no. 5 (December 1994): 1141-1156.
3 Labor Demand, Minimum Wages, and Anomalies

Models of the Demand for Labor

Minimum Wages

Immigration

Competitive Labor Market Anomalies
Models of the Demand for Labor

Hamermesh, D. "The Demand for Labor in the Long Run." Chapter 8 in Handbook of Labor Economics. Vol. 1. Edited by O. Ashenfelter and R. Layard. 1986.

———. Chapters 2 and 3 in Labor Demand. Princeton, NJ: Princeton University Press, 1993, pp. 18-136.

Nickell, S. "Dynamic Models of Labour Demand." Chapter 9 in Handbook of Labor Economics. Vol. 1. Edited by O. Ashenfelter and R. Layard. 1986.

Varian, H. Microeconomic Analysis. 3rd ed. New York: Norton, 1992.

Minimum Wages

Neumark, D., and B. Wascher. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania: Comment." American Economic Review 90, no. 5 (December, 2000): 1362-1396.

Card, D., and A. Krueger. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania: Reply." American Economic Review 90, no. 5 (December, 2000): 1397-1420.

Baker, M., D. Benjamin, and S. Stanger. "The Highs and Lows of the Minimum Wage Effect: A Time Series-Cross Section Study of the Canadian Law." Journal of Labor Economics 17, no. 2 (April, 1999): 318-50.

Card, D., and A. Krueger. Myth and Measurement: The New Economics of the Minimum Wage. Princeton, N. J.: Princeton University Press, 1995.

Dickens, R., S. Machin, and A. Manning. "The Effects of Minimum Wages on Employment: Theory and Evidence From Britain." Journal of Labor Economics 17, no. 1 (January 1999): 1-22.

Kennan, J. "The Elusive Effects of Minimum Wages." Journal of Economic Literature 33, no. 4 (December 1995): 1950-1965.

Lang, K., and S. Kahn. "The Effect of Minimum Wage Laws on the Distribution of Employment: Theory and Evidence." Journal of Public Economics 69, no. 1 (July 1998): 67-82.

Brown, C. "Minimum Wages, Employment, and the Distribution of Income." Chapter 32 in Handbook of Labor Economics. Edited by O. Ashenfelter and D. Card. Vol. 3, 1999.

Immigration

Card, David. "Immigrant Inflows, Native Outflows, and the Labor Market Impacts of higher Immigration." Journal of Labor Economics 19, no. 1 (2001): 22-64.

———. "The Impact of the Mariel Boatlift on the Miami Labor Market." Industrial and Labor Relations Review 43, no. 2 (1990): 245-257.

Johnson, George E. "The Labor Market Effects of Immigration." Industrial and Labor Relations Review 33, no. 3 (1980): 331-341.

Competitive Labor Market Anomalies

Card, David, and Dean Hyslop. "Does Inflation Grease the Wheels of the Labor Market?" In Reducing Inflation: Motivation and Strategy. Edited by C. D. Romer and D. H. Romer. Chicago: University of Chicago Press. [NBER, Studies in Business Cycles, 30.]

Bewley, T. Chapters 8 in Why Wages Don’t Fall During a Recession, 1999. Harvard University Press, 2000. p. 21.

Burdett, K., and D. T. Mortensen. "Wage Differentials, Employer Size and Unemployment." International Economic Review 39 (1998): 257-273.

Mortensen, D. T. Chapters 1-4 in Wage Dispersion: Why are Similar Workers Paid Differently. Cambridge, Mass.: MIT Press, 2003.

Manning, Alan. Chapters 1 and 2 in Monopsony in Motion: Imperfect Competition in Labor Markets. Princeton, N. J.: Princeton University Press, 2003.

Jacobson, L. S., R. J. Lalonde, and D. G. Sullivan. "Earnings Losses of Displaced Workers." American Economic Review 83 (1993): 685-709.

Gibbons, Robert, and Lawrence Katz. "Does Unmeasured Ability Explain Inter-Industry Wage Differentials?" Review of Economic Studies 59, no. 3 (July 1992): 515-535.

Baker, George, Michael Gibbs, and Bengt Holmstrom. "The Internal Economics of the Firm: Evidence from Personnel Data." Quarterly Journal of Economics 109, no. 4 (November 1994): 881-919.

Beaudry, Paul, and John DiNardo. "The Effects of Implicit Contracts on the Behavior of Wages over the Business Cycle." Journal of Political Economy (August 1991): 665-688.

Topel, Robert H., and Michal P. Ward. "Job Mobility and the Careers of Young Men." The Quarterly Journal of Economics (May 1992): 439-79.

DellaVigna, Stefano, and M. Daniele Paserman. "Job Search and Impatience." NBER Working Paper 10837 (October 2004). (PDF)

Paserman, Daniele. "Job Search and Hyperbolic Discounting: Structural Estimation and Policy Implications." Manuscript, Hebrew University of Jerusalem, September 2003.

Frank, Robert H., and Robert M. Hutchens. "Wages, Seniority, and the Demand for Rising Consumption Profiles." Journal of Economic Behavior and Organization 21: 251-76.
4 Human Capital and the Econometrics of Individual Wage Determination

Schooling, Experience, and Earnings

Liquidity Constraints

Compulsory Schooling
Schooling, Experience, and Earnings

Mincer, J. Schooling, Experience, and Earnings. New York: NBER, 1974.

Becker, G. Human Capital. 3rd ed. Chicago: University of Chicago Press, 1993.

Willis, R. J. "Wage Determinants." Chapter 10 in The Handbook of Labor Economics. Vol. 1.

Willis, R. J., and Sherwin Rosen. "Education and Self-Selection." Journal of Political Economy 87, no. 5 Part 2 (October 1979): S7-S36.

Freeman, R. "Demand for Education." Chapter 6 in The Handbook of Labor Economics. Vol. 1, 1986.

Griliches, Z. "Estimating the Returns to Schooling: Some Econometric Problems." Econometrica 45, no. 1 (January 1977): 1-22.

Griliches, and Mason. "Education, Income and Ability." Journal of Political Economy 80, no. 3 Part 2(May-June 1972): S74-S103.

Angrist, J. D., and A. Krueger. "Does Compulsory Schooling Attendance Affect Schooling and Earnings?" Quarterly Journal of Economics 106, no. 4 (November 1991): 979-1014.

Card, D. "Earnings, Schooling, and Ability Revisited." Edited by S. Polachek. Research in Labor Economics 14 (1995): 23-48.

———. "The Causal Effect of Education on Earnings." In The Handbook of Labor Economics. Vol. 3A, 1999.

Freeman, R. "Overinvestment in College Training." Journal of Human Resources 10, no. 3 (Summer 1975): 287-311.

Angrist, J. "Lifetime Earnings and the Vietnam Era Draft Lottery: Evidence from Social Security Administrative Records." American Economic Review 80, no. 3 (June 1990): 313-336.

Card, D., and A. Krueger. "Does School Quality Matter? Returns to Education and the Characteristics of Public Schools in the United States." Journal of Political Economy 100 (February 1992): 1-40.

Altonji, J., and R. Shakotko. "Do Wages Rise with Job Seniority?" Review of Economic Studies (July 1987).

Ben-Porath, Yoram. "The Production of Human Capital Over the Life Cycle." Journal of Political Economy 75, no. 4 Part 1 (August 1967): 352-365.

Roy, A. "Some Thoughts on the Distribution of Earnings." Oxford Economic Papers (1951): 235-46.

Card, David. "Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems." Econometrica 69, no. 5 (2001): 1127-60.

Levhari, David, and Yoram Weiss. "The Effect of Risk on the Investment in Human Capital." American Economic Review 64, no. 6 (1974): 950-63.

Liquidity Constraints

Carneiro, Pedro, and James J. Heckman. "The Evidence on Credit Constraints in Post-secondary Schooling." Economic Journal (October 2002):705-734.

Cameron, Stephen, and James Heckman. "The Dynamics of Educational Attainment for Black, Hispanic, and White Males." Journal of Political Economy 109, no. 3 (2001): 455-499. (PDF)

Cameron, Stephen, and Christopher Taberk. "Borrowing Constraints and the Returns to Schooling." NBER Working Paper 7761 (2000). (also JPE forthcoming) (PDF)

Kane, Thomas J. "A Quasi-Experimental Estimate of the Impact of Financial Aid on College-Going." NBER Working Paper 9703 (May 2003). (PDF)

———. "Rising Public College Tuition and College Entry: How Well Do Public Subsidies Promote Access to College?" NBER Working Paper 5164 (July 1995). (PDF)

———. "Evaluating the Impact of the D.C. Tuition Assistance Grant Program." Mimeo (2004).

Dynarski, Susan. "Does Aid Matter? Measuring the Effect of Student Aid on College Attendance and Completion." American Economic Review (2003).

———. "Hope for Whom? Financial Aid for the Middle Class and Its Impact on College Attendance." NBER Working Paper 7756 (2000). (PDF)

Meghir, Costas, and Marten Palme. "Ability, Parental Background and Education Policy: Empirical Evidence from a Social Experiment." IFS Mimeo.

Compulsory Schooling

Oreopoulos, Philip. "Do Dropouts Drop Out Too Soon? International Evidence from Changes in School Leaving Laws." NBER Working Paper 10155 (2003). (PDF)

Angrist, J., and D. Acemoglu. "How Large are Human Capital Externalities? Evidence From Compulsory Attendance Laws." NBER Macro Annual 15 (2000).

Lleras-Muney, Adriana. "The Relationship Between Education and Adult Mortality in the United States." NBER Working Paper 8986 (2002). (PDF) [and RESTUD forthcoming]

Lochner, Lance, and Enrico Moretti. "The Effect of Education on Crime: Evidence from Prison Inmates, Arrests, and Self-Reports." NBER Working Paper 8605 (2001). (PDF) [and American Economic Review]
5 Intergenerational Mobility Solon, G. "Intergenerational Mobility in the Labor Market." In Handbook of Labor Economics. Vol. 3A. Edited by O. Ashenfelter and D. Card. Amsterdam: El Sevier, 1999.

Case, Anne, Darren Lubotsky, and Christina Paxon. "Economic Status and Health in Childhood: Origins of the Gradient." American Economic Review 92, no. 5 (2002): 1308-34.

Becker, G., and N. Tomes. "Human Capital and the Rise and Fall of Families." Journal of Labor Economics 4, no. 3.2 (1986): S1-S39.

Mulligan, C. "Galton vs. the Human Capital Approach to Inheritance." Journal of Political Economy 107, no. 6.2 (1999): S184-S224.

Solon, G. "Intergenerational Income Mobility in the United States." American Economic Review 82, no. 3 (1992): 393-48.

Haider, Steven, and Gary Solong. "Life Cycle Variation in the Association Between Current and Lifetime Earnings." University of Michigan Mimeo (2004).

Mazumder, Bhashkar. "Earnings Mobility in the US: A New Look at Intergenerational Inequality." Federal Reserve Bank of Chicago Working Paper (2001). (PDF - 1.2MB) [and RESTUD, forthcoming]

Borjas, G. "Ethnic Capital and Intergenerational Mobility." Quarterly Journal of Economics 107, no. 1 (1992): 123-150.

Altonji, J., and T. Dunn. "Relationships among the Family Incomes and Labor Market Outcomes of Relatives." Research in Labor Economics 12 (1991): 269-310.

Behrman, J., and P. Taubman. "Intergenerational Earnings Mobility in the United States: Some Estimates and a Test of Becker’s Intergenerational Endowments Model." Review of Economics and Statistics 67, no. 1 (1985): 144-151.

Goldberger, A. "Economic and Mechanical Models of Intergenerational Transmission." American Economic Review 79, no. 3 (1989): 504-513.

Zimmerman, D. "Regression Toward Mediocrity in Economic Stature." American Economic Review 82, no. 3 (1992): 409-429.

Rosenzweig, M., and K. Wolpin. "Parental and Public Transfers to Young Women and Their Children." American Economic Review 84, no. 5 (1994): 1195-1212.

Oreopoulos, Philip, Marianne Page, and Ann Stevens. "Does Human Capital Transfer from Parent to Child? The Intergenerational Effects of Compulsory Schooling." NBER Working Paper 10164. (PDF)

Antonovics, Kate, and Arthur S. Goldberger. "Do Educated Women Make Bad Mothers? Twin Studies of the Intergenerational Transmission of Human Capital." Mimeo (2003). (PDF)

Behrman, Jere R., and Mark R. Rosenzweig. "Does Increasing Women's Schooling Raise the Schooling of the Next Generation?" American Economic Review 92, no. 1 (March 2002): 323-334.

Behrman, Jere R., Mark R. Rosenzweig, and Paul Taubman. "Endowments and the Allocation of Schooling in the Family and in the Marriage Market: The Twins Experiment." Journal of Political Economy 102, no. 6 (1994): 1131-74.

Bjorklund, A., M. Jantii, O. Raaum, E. Osterback, and T. Eriksson. "Brother Correlations in Earnings in Denmark, Finland, Norway and Sweden Compared to the United States." Journal of Population Economics 15 (2002): 757-772.

Black, Sandra, Paul J. Devereux, and Kjell G. Salanes. "Is Education Inherited? Understanding Intergenerational Transmission of Human Capital." Mimeo, UCLA (2003). (PDF - 1.0 MB)

Currie, Janet, and Enrico Moretti. "Mother’s Education and the Intergenerational Transmission of Human Capital: Evidence from College Openings and Longitudinal Data." Working Paper (August 2002). [and QJE]

Rosenzweig, Mark R., and Kenneth I. Wolpin. "Are There Increasing Returns to the Intergenerational Production of Human Capital? Maternal Schooling and Child Intellectual Achievement." Journal of Human Resources 29, no. 2 (Spring 1994): 670-693.

Sacerdote, Bruce. "The Nature and Nurture of Economics Outcomes." American Economic Review and American Economic Association 92, no. 2 (May 2002): 344-348.

Oreopoulos, Page, Marianne Page, and Ann Stevens. "The Intergenerational Effects of Worker Displacement." Mimeo.

Second Part - Prof. Acemoglu
6 Incentives in Organizations

Basic Theory of Moral Hazard and Incentives, and Applications to CEO
Pay and Unempolyment Insurance

Multitasking and Counter-Productive Incentives

Career Concerns

Additional Topic: Wage Dynamics (will not be covered in the lectures)

Holdups and Investments

Efficiency Wages, Unemployment and Organization of the Firm
Incentives in Organizations

Prendergast, Canice. "The Provision of Incentives in Firms." Journal of Economic Literature 28 (1999): 7-63.

Lazear, Edward. Personnel Economics. Cambridge, Mass.: MIT University Press, 1996.

Gibbons, Robert. "Incentives and Careers in Organizations." In Advances in Economics and Econometrics: Theory and Applications. Edited by David Kreps and Ken Wallis. Cambridge: Cambridge University Press, 1996.

Basic Theory of Moral Hazard and Incentives, and Applications to CEO Pay and Unemployment Insurance

CZ, Chapter 6.

Salanie, Bernard. Chapter 5 in The Economics of Contracts: A Primer. Cambridge, Mass. and London: MIT University Press, 1997.

Laffont, Jean-Jacques, and David Martimort. Chapter 4 in The Theory of Incentives: The Principal-Agent Model. Princeton, N.J.: Princeton University Press, 2002.

Holmstrom, Bengt. "Moral Hazard and Observability." Bell Journal of Economics 10 (1979): 74-91.

Lazear, Edward. Chapter 2 in Personnel Economics. Cambridge, Mass. and London: MIT University Press, 1996.

CZ, Chapter 11.

Lazear, Edward. "Performance Pay and Productivity." American Economic Review 90 (2000): 1346-61.

Murphy, Kevin J. "Corporate Performance and Managerial Remuneration: An Empirical Analysis." Journal of Accounting and Economics 7 (1985): 11-42.

Courty, Pascal, and Gerald Marschke. "An Empirical Investigation of Gaming Responses to Explicit Performance Incentives." Journal of Labor Economics 22 (2004): 23-56.

Oyer, Paul. "Fiscal Year Ends and Nonlinear Incentive Contracts: The Effect on Business Seasonality." Quarterly Journal of Economics 113 (1998): 149-85.

Alston, Lee, and Robert Higgs. "Contractual Mix in Southern Agriculture since the Civil War: Facts, Hypotheses, and Test." Journal of Economic History 42 (1982): 327-53.

Shavell, Steven, and Laurence Weiss. "The Optimal Payment of Unemployment Benefits over Time." Journal of Political Economy 87 (1979): 1347--62.

Hopenhayn, Hugo, and Juan Pablo Nicolini. "Optimal Unemployment Insurance." Journal of Political Economy 105 (1997): 412-438.

Multitasking and Counter-Productive Incentives

Holmstrom, Bengt, and Paul Milgrom. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design." Journal of Law, Economics and Organization 7, no. 0 (Special Issue) (1991): 24-52.

Laffont, Jean-Jacques, and David Martimort. "The Theory of Incentives: The Principal-Agent Model." Princeton, N.J.: Princeton University Press, 2002. Chapter 4.

Baker, George P. "Incentive Contracts and Performance Measurement." Journal of Political Economy 100, no. 3 (1992): 598-614.

Career Concerns

Wilson, James. Bureaucracy: What Government Agencies Do and Why They Do It. New York: Basic Books Classics, 1989.

Holmstrom, Bengt. "Managerial Incentive Problems: A Dynamic Perspective." Review of Economic Studies 66, no. 1 (1999): 169-82.

Dewatripont, Mathias, Ian Jewitt, and Jean Tirole. "The Economics of Career Concerns, Part I: Comparing Information Structures." Review of Economic Studies 66, no. 1 (January 1999): 183-198.

Dixit, Avinash. "Incentives and Organizations in the Public Sector: An Interpretative Review." Journal of Human Resources 37, no. 4 (Fall 2002): 696-727.

Acemoglu, Daron, Michael Kremer, and Atif Mian. "Incentives in Markets, Firms and Governments." NBER Working Paper 9802 (2003). (PDF)

Chevalier, Judith, and Glenn Ellison. "Career Concerns of Mutual Fund Managers." Quarterly Journal of Economics 114 (1999): 389-432.

Additional Topic: Wage Dynamics

Harris, Milton, and Bengt Holmstrom. "A Theory of Wage Dynamics." Review of Economic Studies 49 (1982): 315-34.

Thomas, Jonathan, and Thomas Worrall. "Self-Enforcing Wage Contracts." Review of Economic Studies 55, no. 4 (October 1988): 541-553.

Rogerson, William. "Repeated Moral Hazard." Econometrica 53 (1985): 69-76.

Baker, George, Michael Gibbs, and Bengt Holmstrom. "The Wage Policy of a Firm." Quarterly Journal of Economics 109, no. 4 (1994): 921-55.

Beaudry, Paul, and John DiNardo. "The Effect of Implicit Contracts on the Behavior of Wages over the Business Cycle." Journal of Political Economy (August 1991): 665-688.

Holdups and Investments

Williamson, Oliver. Markets and Hierarchies: Analysis and Antitrust Implications. New York: The Free Press, 1975.

Laffont, Jean-Jacques, and David Martimort. The Theory of Incentives: The Principal-Agent Model. Princeton, N.J.: Princeton University Press, 2002. Chapter 6.

Grout, Paul. "Investment and Wages in the Absence of Binding Contracts: A Nash Bargaining Approach." Econometrica 52 (1984): 449-460.

Grossman, Sanford, and Oliver Hart. "The Costs and Benefits of Ownership: a Theory of Vertical and Lateral Integration." Journal of Political Economy 94 (1986): 691-719.

Hart, Oliver, and John H. Moore. "Property Rights and the Nature of the Firm." Journal of Political Economy 98 (1990): 1119-58.

Efficiency Wages, Unemployment and Organization of the Firm

CZ, Chapter 6.

Shapiro, Carl, and Joseph Stiglitz. "Equilibrium Unemployment as Worker Discipline Device." American Economic Review 74 (1984): 433-444.

Bulow, Jeremy, and Lawrence Summers. "A Theory of Dual Labor Markets with Application to Industrial Policy, Discrimination and Keynesian Unemployment." Journal of Labor Economics 4 (1986): 376-415.

Acemoglu, Daron and Andrew Newman. "The Labor Market and Corporate Structure." European Economic Review 46 (December 2002): 1733-1756.

Lazear, Edward. Personnel Economics. Cambridge, Mass. and London: MIT Press, 1996. Chapter 3.

Fehr, Ernst, and Simon Gachter. "Fairness and Retaliation: The Economics of Reciprocity." Journal of Economic Perspectives 14, no. 3 (2000): 159-81.

Akerlof, George A. "Labor Contracts as Partial Gift Exchange." Quarterly Journal of Economics 97, no. 4 (1982): 543-569.

Fehr, Ernst, and Simon Gachter. "Do Incentive Contracts Crowd Out Voluntary Cooperation?" University of Zurich Mimeo (April 2002).

Campbell III, Carl M., and Kunal S. Kamlani. "The Reasons for Wage Rigidity: Evidence from a Survey of Firms." Quarterly Journal of Economics 112, no. 3 (1997): 759-789.

Neil, Derek. "Supervision and Wages Across Industries." Review of Economics and Statistics 75 (August 1993): 409-17.

Krueger, Alan B. "Ownership, Agency and Wages: An Examination of Franchising in the Fast Food Industry." Quarterly Journal of Economics 106, no. 1 (1991): 75-101.

Cappelli, Peter and Keith Chauvin. "An Interplant Test of the Efficiency Wage Hypothesis." Quarterly Journal of Economics 106, no. 3 (1991): 769-787.

Krueger, Alan B, and Lawrence H. Summers. "Efficiency Wages and the Inter-Industry Wage Structure." Econometrica 56, no. 2 (1988): 259-93.
7 Search Models of the Labor Market

Partial Equilibrium

The Basic Search Framework

Additional Material: Wage Dispersion and Composition of Jobs

Additional Material: Risk Aversion and Insurance (will not be covered in the lectures)
Search Models of the Labor Market

Pissarides, Christopher. Equilibrium Unemployment Theory. Cambridge, Mass. and London: MIT Press, 2000.

Rogerson, Richard, Robert Shimer, and Randall Wright. "Search-Theoretic Models of the Labor Market: A Survey." NBER Working Paper 10655 (July 2004).

Partial Equilibrium

CZ, Chapter 3.

Rogerson op. cit.

The Basic Search Framework

Pissarides. Chapters 1, 2, and 8.

CZ. Chapter 7 in Bargaining Theory.

Hosios, Arthur. "On the Efficiency of Matching and Related Models of Search and Unemployment." Review of Economics Studies 57, no. 2 (1990): 279-98.

Blanchard, Olivier, and Peter Diamond. "The Beveridge Curve." Brookings Papers on Economics Activity 1 (1989): 1-60.

Mortensen, Dale, and Christopher Pissarides. "Job Creation and Job Destruction in the Theory of Unemployment." Review of Economic Studies 61 (1994): 397-416.

Additional Material: Wage Dispersion and Composition of Jobs

Burdett, K., and D. T. Mortensen. "Wage Differentials, Employer Size and Unemployment." International Economic Review 39 (1998): 257-273.

Acemoglu, Daron. "Good Jobs vs Bad Jobs." Journal of Labor Economics 19 (January 2001): 1-22.

Acemoglu, Daron, and Robert Shimer. "Wage and Technology Dispersion." Review of Economic Studies 67 (October 2000): 585-608.

Additional Material: Risk Aversion and Insurance

Acemoglu, Daron, and Robert Shimer. "Efficient Unemployment Insurance." Journal of Political Economy 107 (October, 1999): 893-928.

Werning, Ivan. Optimal Unemployment Insurance with Unobservable Savings. MIT Mimeo (2003). (PDF)

Shimer, Robert, and Ivan Werning. Optimal Unemployment Insurance with Sequential Search. MIT Mimeo (2004). (PDF)
8 Investments in Skills

Human Capital Over the Life Cycle

Investments and Market Transactions

Theories of Training

Firm-Specific Capital
Investments in Skills

Becker, Gary. Human Capital. The University of Chicago Press, 1964.

Human Capital Over the Life Cycle

CZ, Chapter 2.

Ben-Porath, Yoram. "The Production of Human Capital Over the Life Cycle." Journal of Political Economy 75, no. 4-1 (1967): 352-365.

Becker, Gary, and Nigel Tomes. "Human Capital and the Rise and Fall of Families." Journal of Labor Economics 4 (1986): S1-S39.

Solon, Gary. "Intergenerational Income Mobility in the United States." American Economic Review 82, no. 3 (June 1992): 393-408.

Zimmerman, David J. "Regression toward Mediocrity in Economic Stature." American Economic Review 82, no. 3 (June 1992): 409-29.

Casey, Mulligan. Parental Priorities and Economic Inequality. University of Chicago Press, 1997.

Investments and Market Transactions

Acemoglu, Daron. "A Microfoundation for Social Increasing Returns in Human Capital Accumulation." Quarterly Journal of Economics 111, no. 3 (1996): 779-804.

Theories of Training

Acemoglu, Daron. "Training and Innovation in An Imperfect Labor Market." Review of Economic Studies 64 (1997a): 445-464.

Acemoglu, Daron, and Steve Pischke. "Why Do Firms Train." Quarterly Journal of Economics 113, no. 1 (1998): 79-119.

———. "The Structure of Wages and Investment in General Training." Journal of Political Economy 107 (June 1999): 539-572.

Autor, David H. "Why do Temporary Help Firms Provide Free General Skills Training?" Quarterly Journal of Economics 116, no. 4 (2001): 1409-1448.

Acemoglu, Daron, and Steve Pischke. "Beyond Becker: Training in Imperfect Labor Markets." Economic Journal 109 (February 1999): F112-142.

———. "Minimum Wages and on-the-Job Training." Research in Labor Economics (2000).

Firm-Specific Capital

Topel, Robert. "Specific Capital, Mobility, and Wages: Wages Rise with Job Seniority." Journal of Political Economy 99, no. 1 (February 1991): 145-76.

Neal, Derek. "Industry-Specific Human Capital: Evidence From Displaced Workers." Journal of Labor Economics 13 (October 1995): 653-77.

Altonji, Joe, and R. Shakotko. "Do Wages Rise With Seniority?" Review of Economies Studies 54 (1987): 437-459.

Abraham, Katherine, and Henry Farber. "Job Duration, Seniority, and Earnings." American Economic Review 77 (1987): 278-297.

Jovanovic, Boyan. "Job Matching and the Theory of Turnover." Journal of Political Economy (1979): 972-990.

———. "Firm Specific Capital and Turnover." Journal of Political Economy. (1979): 1246-1260.

Lazear, Edward. "Firm-Specific Human Capital: A Skill Weights Approach." NBER Working Paper 9679 (May 2003).

Topel, Robert, and Michael Ward. "Job Mobility and the Careers of Young Men." Quarterly Journal of Economics 107, no. 2 (May 1992): 439-479.

Prendergast, Canice. "The Role of Promotion in Inducing Specific Human Capital Acquisition." Quarterly Journal of Economics 108, no. 2 (1993): 523-534.

Charmichael, Lorne. "Firm-Specific Capital and Promotion Ladders." Bell Journal of Economics 14, no. 1 (1983): 251-258.

Lazear, Edward P. Personnel Economics. Cambridge: MIT Press, 1995. Chapter 7.
9 Technology and the Labor Market

Basic Patterns and Relative-supply-demand Framework

Theories of Skill-Biased Technical Change and Returns to Skills

Changes in the Composition of Jobs, Organizational Change, Superstars, and Hierarchies
Technology and The Labor Market

Acemoglu, Daron. "Technical Change, Inequality and the Labor Market." Journal of Economic Literature 40 (March 2002): 7-72.

Basic Patterns and Relative-Supply-Demand Framework

Katz, Lawrence F., and David H. Autor. "Changes in the Wage Structure and Earnings Inequality." In Handbook of Labor Economics. Vol. 3A. Edited by Orley Ashtenfelter and David Card. Amsterdam: North-Holland, 1999.

Katz, Lawrence F., and Kevin M. Murphy. "Changes in Relative Wages, 1963- 1987: Supply and Demand Factors." Quarterly Journal of Economics 107 (1995): 35-78.

Autor, David H., Lawrence F. Katz, and Alan B. Krueger. "Computing Inequality: Have Computers Changed The Labor Market." Quarterly Journal of Economics 113, no. 4 (1998): 1169-1213.

Juhn, Chinhui, Kevin M. Murphy, and Brooks Pierce. "Wage Inequality and the Rise in Returns to Skill." Journal of Political Economy 101, no. 3 (1993): 410-442.

Goldin, Claudia, and Lawrence Katz. "The Returns to Skill in the United States Across the Twentieth Century." NBER Working Paper 7126 (May 2000). (PDF)

Theories of Skill-Biased Technical Change and Returns to Skills

CZ, Chapter 10.

Berman, Eli, John Bound, and Zvi Griliches. "Changes in the Demand for Skilled Labor within U. S. Manufacturing: Evidence from the Annual Survey of Manufacturing." Quarterly Journal of Economics 109, no. 2 (1994): 367-397.

Berman, Eli, John Bound, and Stephen Machin. "Implications of Skill-Biased Technological Change: International Evidence." Quarterly Journal of Economics 113 (1998): 1245-1280.

Machin, Stephen, and John Van Reenen. "Technology and Changes in Skill Structure: Evidence from Seven OECD Countries." Quarterly Journal of Economics 113, no. 4 (November 1998): 1215-44.

Goldin, Claudia, and Lawrence Katz. "The Origins of Technology-Skill Complementarity." Quarterly Journal of Economics (August 1998): 693-732.

Krusell, Per, Lee Ohanian, Victor Rios-Rull, and Giovanni Violante. "Capital-Skill Complementarity and Inequality." Econometrica 68, no. 5 (2000): 1029-1053.

Krueger, Alan. "How Computers Have Changed the Wage Structure: Evidence from Microdata." Quarterly Journal of Economics 108 (1993): 33-60.

Greenwood, Jeremy, and Mehmet Yorukoglu. "1974" Carnegie-Rochester Conference Series on Public Policy XLVI (1997): 49-95.

Acemoglu, Daron. "Why do New Technologies Complement Skills: Directed Technical Change and Wage Inequality." Quarterly Journal of Economics 113, no. 4 (1998): 1055-1089.

Doms, Mark, Timothy Dunne, and Kenneth Torske. "Workers, Wages and Technology." Quarterly Journal of Economics 112 (1997): 253-290.

Caselli, Francesco. "Technological Revolutions." American Economic Review 89 (1999): 78-102.

Galor, Oded, and Daniel Tsiddon. "Technological Progress, Mobility and Economic Growth." American Economic Review 87 (1996): 363-382.

Galor, Oded, and Omer Maov. (1998) "Ability Biased Technological Transition, Wage Inequality and Economic Growth." Quarterly Journal of Economics 115 (2000): 469-497.

Changes in the Composition of Jobs, Organizational Change, Superstars, and Hierarchies

Acemoglu, Daron. "Changes in Unemployment and Wage Inequality: An Alternative Theory and Some Evidence." American Economic Review 89, no. 1999a (1998): 1259-1278.

Neal, Derek, and Sherwin Rosen. "Theories of Labor Earnings." In Handbook of Income Distribution. Edited by A.B. Atkinson and F. Bourguignon. North Holland, 2000.

Autor, David, Frank Levy, and Richard Murnane. "The Skill Content of Recent Technological Change: An Empirical Exploration." NBER 8337 (June 2001).

Ichniowski, Casey, Katherine Shaw, and G. Prennushi. "The Effects of Human Resource Management Practices on Productivity: A Study of Steel Finishing Lines." American Economic Review 87, no. 3 (1997): 291–313.

Caroli, Eve, and John van Reenen. "Skill-Biased Organizational Change: Evidence from a Panel of British and French Establishments." Quarterly Journal of Economics 116 (November 2001): 1449-1492.

Bresnahan, Timothy F., Erik Brynjolfsson, and Lorin M. Hitt. "Information Technology, Workplace Organization and the Demand for Skilled Labor: Firm-level Evidence." Quarterly Journal of Economics 117 (2002): 339-376.

Thesmar, David, and Mathias Thoenig. "Creative Destruction and Firm Organization Choice: A New Look into the Growth-Inequality Relationship." Quarterly Journal of Economics 115 (2000): 1201-1237.

Kremer, Michael, and Eric Maskin. Segregation By Skill and the Rise in Inequality. MIT and Harvard Mimeo (1999).

Rosen, Sherwin. "The Economics of Superstars." American Economic Review 71 (1981): 845–858.

Becker, Gary S., and Kevin M. Murphy. "The Division of Labor, Coordination Costs and Knowledge." Quarterly Journal of Economics 107, no. 4 (1994): 1137–1160.

Garicano, Luis. "Hierarchies and the Organization of Knowledge and Production." Journal of Political Economy 108 (2000): 874-905.

Saint-Paul, Gilles. "On the Distribution of Income and Worker Assignment under Intrafirm Spillovers, with an Application to Ideas and Networks." Journal of Political Economy 109 (2001): 1-37.