Labor II

The course discusses labor demand with a focus on topics emphasized in recent research, such as the labor market impact of technological change and the role of firm-level pay practices for wage inequality between men and women.

The first half of the course, taught by Georg Graetz, explores the determinants of labor demand and wages, taking as a point of departure a frictionless, perfectly competitive labor market. Theoretical frameworks studied include neoclassical producer theory and the task framework. An overview of recent empirical evidence is given, with a focus on wage inequality, job polarization, technological change, and the interaction of technology adoption and immigration. This part also covers the causal identification of shocks to labor demand (and supply) and discusses some recent insights on Bartik (shift-share) instruments, with applications to trade, technology, and immigration.

The second part of the course, taught by Oskar Nordström Skans, focuses on the role of firms in the labor market. We discuss how to identify (and model) firm-level wage rents and the impact these rents have on wage inequality in general and across different groups of workers. Special emphasis is also put on understanding the granularities of the process when workers are matched to jobs: What is the role of uncertainty and learning about worker abilities? How does uncertainty affect firms' hiring practices? What is the role of social networks?

This course is part of a sequence of second-year courses in labour economics taught jointly with Stockholm University.
Last modified: 2023-11-07