Labor Economics I
$PREREQUISITES: G31.1003 AND G31.1005 OR G31.1023 & G31.1025 OR PERMISSION OF INSTRUCTOR.
Focuses on dynamic models of labor market behavior. Reviews dynamic optimization theory and develops the model of job market search. The baseline model for analyses of labor market dynamics at the industrial level and the search model are used to discuss estimation issues and to build partial equilibrium models of the labor market. Other models of equilibrium wage determination include signaling models, matching models, and models with asymmetric information and moral hazard (efficiency wages). Considers theory and empirical implications of the human capital investment model, with applications to occupational choice and the effect of cohort size on human capital investment and earnings outcomes.