ECONOMICS 531 LABOR ECONOMICS I

Selected Readings in Human Capital and Labor Market Analysis

Barry R. Chiswick Fall !!"

Revised 8/09

Economics 531 Labor Economics I Mon#ay$ %&'(3! )M

Barry R. Chiswick Fall !!"

O**ic+ ,o-rs( Mon#ay$ 3(3!&5(!! . by a//oin0m+n0 3, Email( brchis4-ic.+#-

O**ic+( 1 2

)hon+( ""%&% 2! #his course will $ocus on the application o$ the principles o$ human capital theory to labor markets% and in particular on the determination o$ skills and the e$$ects o$ skill on labor market outcomes. &ts prere'uisite is satis$actory completion o$ (conomics )!* or (conomics ) !% or an e'ui+alent course. #here is no graduate le+el labor economics te,tbook. #here$ore% you will ha+e the opportunity to read the original research papers. Students without prior e,perience in an undergraduate course in Labor (conomics are ad+ised to do additional background reading in an ad+anced undergraduate te,tbook. An e,cellent undergraduate te,tbook that pro+ides a $oundation $or the more ad+anced readings is- Ronal# 5. Ehr+nb+r6 an# Rob+r0 S. Smi0h$ Mo#+rn Labor Economics( 7h+ory an# )-blic )olicy$ 5l+n8i+w$ IL( Sco00$ For+sman an# Co. .Any edition is ok./ Read chapters * and as an introduction to Labor (conomics and other chapters to get a broader perspecti+e on the $ield. #he schedule and selected bibliography are sub0ect to re+ision as the course progresses. Core readings are designated by 1. Many o$ the articles on the reading list% especially those that are at least $i+e years old% can be accessed using 2S#3R which is a+ailable +ia the 4&C Library homepage. 3ther papers are a+ailable on the &5A webpage. 6o to www.i7a.org% click on publications% then on 8iscussion papers. #he course will include a two hour $inal e,am. &n addition% each student is to write a *%)!! word re+iew o$ an article o$ their choice% sub0ect to appro+al by the instructor. Some students will be gi+en the opportunity to gi+e an oral presentation o$ their re+iew. Since the &llinois (conomics Association Annual Meeting will be held on the 4&C campus during the semester .3ctober *9:*;/% each student will write an assessment .o$ about *%!!! words/ o$ one session held at this meeting. #he class will not meet on Labor 8ay% September ;% or September <. &$ time permits there will be a re+iew session in the last class meeting.

Sch+#-l+ an# S+l+c0+# Bio6ra/hy I. In0ro#-c0ion 91: ;++k< 1(hrenberg and Smith% Chapters *: II. ,-man Ca/i0al 7h+ory 93&1: ;++ks< 1. 7h+ 7h+ory 1(hrenberg and Smith% Chapters " and ). 16ary S. Becker% Human Capital% =art *% >B(R% ?rd (dition. .>ote- #his book was cited in the award o$ Becker@s *"" >obel =ri7e in (conomics/. 1#heodore A. Schult7% B#he Calue o$ the Ability to 8eal with 8ise'uilibria%D 2ournal o$ (conomic Literature% September *";)% pp. < ;:<E9. 1Cotton Mather Lindsay% BMeasuring Human Capital Returns%D 2ournal o$ =olitical (conomy% >o+ember *";*% *% *"):*% *). 1#heodore A. Schult7% ed. &n+estment in Human Beings% Supplement% 2ournal o$ =olitical (conomy% 3ctober% *"9 . .esp. articles by Becker and Mincer/ 2ack Hirshlei$er% B3n the #heory o$ 3ptimal &n+estment 8ecision%D 2ournal o$ =olitical (conomy% August *")<% pp. ? ":?) . .3nly $irst part o$ this article is pertinent./. Foram Ben:=orath% B#he =roduction o$ Human Capital and the Li$e Cycle o$ (arnings%D 2ournal o$ =olitical (conomy% August *"9;% pp. ?) :?9). Alan Blinder and Foram Aeiss% BHuman Capital and Labor Supply- A Synthesis%D 2ournal o$ =olitical (conomy% 2une *";9% pp. EE":E; . Sherwin Rosen% BHuman Capital%D #he >ew =algra+e- A 8ictionary o$ (conomics% Macmillan =ress% *"<;% pp. 9<*:9"!. . A//lica0ions

1Barry R. Chiswick% B8i$$erences in (ducation and (arnings Across Racial and (thnic 6roups%D Guarterly 2ournal o$ (conomics% August *"<<% pp. );*:)";. 1A. Ste+en Barnett% BBene$its o$ Compensatory =reschool (ducation%D 2ournal o$ Human

E Resources% Col. ;% >o. % Spring *"" % pp. ;":?* . 1Michael =. Shields . !!</ BAhy Should State 6o+ernment &n+est in College (ducationH An ('uilibrium Approach $or the 4S in !!!D &5A 8iscussion =aper% >o ?)9". Barry R. Chiswick and =aul A. Miller BAhy is the =ayo$$ to Schooling Smaller $or &mmigrantsHD Labour Economics% !!<% *).9/ pp *?*;:*?E! 1Ann =. Bartel and Frank R. Lichtenberg% B#he Comparati+e Ad+antage o$ (ducated Aorkers in &mplementing >ew #echnology%D Re+iew o$ (conomics and Statistics% Col. 9"% >o. *% February *"<;% pp. *:**. 12acob Mincer B#echnology and the Labor Market.D Re+iew o$ the (conomics o$ the Household !!?% *.E/. Herbert 2. Aalberg% B&mpro+ing the =roducti+ity o$ America@s Schools%D and Ralph A. #ylor % BA 6uide to (ducational #rouble Shooting%D (ducational Leadership% May *"<E% pp. *":?!. Carmel 4. Chiswick% B#he 6rowth o$ =ro$essional 3ccupations in 4.S. Manu$acturing% *"!!: *";?%D in &. Sirageldin% Research in Human Resources and 8e+elopment% 2A& =ress% *";"% pp. *"*: *;. Stanley A. Horowit7 and Allan Sherman% BA 8irect Measure o$ the Relationship Between Human Capital and =roducti+ity%D 2ournal o$ Human Resources% Ainter *"<!% pp. 9;:;;. Barry R. Chiswick and Stella Ioutromanes% BAn (conometric Analysis o$ the 8emand $or =ri+ate Schooling%D Research in Labor (conomics% Col. *)% *""9% pp. ):E*. 3. ,-man Ca/i0al 8s. Scr++nin6 Barry R. Chiswick% BSchooling% Screening and &ncomeD in L. Solmon and =. #aubman .(ds./ 8oes College MatterH Some (+idence on the &mpacts o$ Higher (ducation% Academic =ress *";?% pp. *)*:*)<. (lchanan Cohn% et al.% BFurther (+idence on the Screening HypothesisD (conomic Letters% Col. )% *"<;% pp. <": "E. Ie+in Lang and 8a+id Iropp% BHuman Capital Cersus Sorting- #he ($$ects o$ Compulsory Attendance Laws%D Guarterly 2ournal o$ (conomics% August *"<9% pp. 9!": E. M. Boisiere% 2. Inight and R. Sobot B(arnings% Schooling% Ability and Cogniti+e Skills%D American (conomic Re+iew% 8ecember *"<)% pp. *%!*9:?*. III. Lan6-a6+ as ,-man Ca/i0al 91 ;++k< 1Barry R. Chiswick and =aul A. Miller . !!;/ The Economics of Language: International

) Analyses .Routledge/ 1Barry R. Chiswick and =aul A. Miller% BModeling &mmigrant@s Language Skills%D Research in Labor Economics% !!<% ; pp ;):* < 1Barry R. Chiswick and =aul A. Miller B#he (ndogeneity Between Language and (arnings&nternational Analyses%D ournal of Labor Economics% April *""). 1Barry R. Chiswick% Few Liang Lee% and =aul A. Miller . !!)/ Revie! of Economics of the "ousehold# ? pp E?: 9< Francisco L. Ri+era J Bati7% BGuantitati+e Literacy and the Likelihood o$ (mployment Among Foung Adults in the 4nited States%D ournal of "uman Resources% Spring *"" % pp. ?*?:? ". Barry R. Chiswick and =aul A. Miller% B(nglish Language Fluency Among &mmigrants in the 4nited States%D Research in Labor Economics% Col. *;% *""<% pp. *)*: !!. #eresa Casey and Christian 8ustman% B&ntergenerational #ransmission o$ Language Capital and (conomic 3utcomesD ournal of "uman Resources# E?.?/% pp 99!:9<;. I=. 7h+ >+0+rminan0s o* Earnin6s 93 ;++ks<

16ary S. Becker and Barry R. Chiswick% B(ducation and the 8istribution o$ (arnings%D American (conomic Re+iew% May *"99% pp. ?)<:9". 1Barry R. Chiswick% B&nterpreting the Coe$$icient o$ Schooling in the Human Capital (arnings Function%D 2ournal o$ (ducational =lanning and Administration% * . / April *""<% pp. * ?:*?!. 1Barry R. Chiswick% B2acob Mincer% #he 8istribution o$ (arnings and the Human Capital (arnings Function.D &n Shoshana 6rossbard% ed.% 2acob Mincer- A =ioneer o$ Modern Labor (conomics . !!)/ or Re+iew o$ (conomics o$ the Household% !!?% *.E/ pp ?E?:?9*. 1Soloman =olochek . !!)/% B2acob Mincer and Human Capital.D &n Shoshana 6rossbard% ed.% 2acob Mincer- A =ioneer o$ Modern Labor (conomics . !!)/. 18a+id Card and Alan B. Irueger% B8oes School Guality MatterH Returns to (ducation and the Characteristics o$ =ublic Schools in the 4nited States%D 2ournal o$ =olitical (conomy% Col. *!!% >o *% February *"" % pp. *:E!. 1Barry R. Chiswick% B#he ($$ect o$ Americani7ation on the (arnings o$ Foreign:Born Men%D 2ournal o$ =olitical (conomy% 3ctober *";<% pp. <";:" *. 18aniel =. Iinney and Sharon =. Smith% BAge and #eaching =er$ormance%D 2ournal o$ Higher (ducation% MayK2une *"" % pp. < :?!*. 12acob Mincer and Haim 3$ek% B&nterrupted Aork Careers- 8epreciation and Restoration o$ Human Capital%D 2ournal o$ Human Resources% Ainter *"< % pp. ?: E.

9 Christian Bel7il and Marco Leonardi BCan Risk A+ersion (,plain School AttainmentH (+idence $rom &talyD Labour Economics% !!;% *E.9/ pp9);:9;!. 2orn:Ste$$en =ischke% B#he &mpact o$ Length o$ the School Fear on Student =er$ormance and (arnings- (+idence $rom the 6erman Short School FearsD Economic ournal% **;.) ?/ pp * *9:* E . (rik =lug and AimCi0+erberg BSchooling% Family Background% and Adoption- &s it >ature or is it >urtureD ournal of $olitical Economy% 2une !!?% ***.?/ pp 9**:9E*. 2acob Mincer and Solomon =olachek% BFamily &n+estments in Human Capital- (arnings o$ Aomen%D 2ournal o$ =olitical (conomy% Supplement% March *";E% s. ;9:s. *!< and B(,changeD Comment by Sandell and Shapiro and Reply by Mincer and =olachek% 2ournal o$ Human Resources% Ainter *";<% pp. *!?:*?E. Solomon =olachek% B8i$$erences in (,pected =ost:School &n+estment as a 8eterminant o$ Market Aage 8i$$erentials%D &nternational (conomic Re+iew% 2une *";)% pp. E)*:E;!. Solomon =olachek% B3ccupational Sel$:Selection- A Human Capital Approach to Se, 8i$$erences in 3ccupational Structure%D Re+iew o$ (conomics and Statistics% February *"<*% pp. 9!:9". Ronald Ri77uto and =aul Aachtel% BFurther (+idence on the Returns to School Guality%D 2ournal o$ Human Resources% Spring *"<!% pp. E!: )E. Barry R. Chiswick% B#he (arnings and Human Capital o$ American 2ews%D 2ournal o$ Human Resources. Summer *"<?% pp. ?*?:?9. Carmel 4. Chiswick% BAnalysis o$ (arnings $rom Household (nterprises- Methodology and Application to #hailand%D Re+iew o$ (conomics and Statistics% >o+ember *"<?. (thel 2ones and 2ohn 2ackson% BCollege 6rades and Labor Market Rewards%D 2ournal o$ Human Resources% Col. )% >o. % Spring *""!% pp. ) : 99. 2oshua Angrist and Alan Irueger% BAhy do Aorld Aar && Ceterans (arn More than >on: +eterans%D 2ournal o$ Labor (conomics% Col. * % >o. *% 2anuary *""E% pp. ;E:";. Robert L. =hillips% =aul 2. Andrisani% #homas >. 8aymont and Curtis L. 6ilroy% B#he (conomic Returns to Military Ser+ice- Race:(thnic 8i$$erences%D Social Science Guarterly% Col. ;?% >o. % 2une *"" % pp. ?E!:?)". Ma0orie Baldwin and Ailliam 6. 2ohnson% BLabor Market 8iscrimination Against Men with 8isabilities%D 2ournal o$ Human Resources% Col. "% >o. *% Ainter *""E% pp. *:*". 2ohn Fredland and Roger Little% BLong:#erm Returns to Cocational #raining- (+idence $rom Military Sources%D 2ournal o$ Human Resources% Ainter *"<!% pp. E":99.

; =. Com/+nsa0in6 ;a6+ >i**+r+n0ials 93 ;++ks< .(hrenberg and Smith% Chapter ?. #his is a good basic discussion o$ the demand $or labor/. ?(hrenberg and Smith% Chapters < and **. ?Adam Smith% Aealth o$ >ations% Book *% Chapters *:? and *!. 1Albert Rees% BCompensating Aage 8i$$erentialsD in A. Skinner and #. Ailson% (ssays on Adam Smith. 3,$ord *";)% pp. ??9:?E". 1R. (. B. Lucas% BHedonic Aage ('uations and =sychic Aages in the Return to Schooling%D American (conomic Re+iew% September *";;% pp. )E":))<. 12oni Hersch and A. Iip Ciscusi% BCigarette Smoking% Seatbelt 4se% and 8i$$erences in Aage: Risk #radeo$$s%D 2ournal o$ Human Resources% Col. )% >o. % Spring *""!% pp. ! : <. 1Reuben 6ronau . !!)/% B2acob Mincer and Labor Supply- Be$ore and A$ter.D &n Shoshana 6rossbard% B2acob Mincer- A =ioneer o$ Modern Labor (conomics .Forthcoming/. 6reg 8uncan% B(arnings Functions and >onpecuniary Bene$its%D 2ournal o$ Human Resources% Fall *";9% pp. E9 :E<?. Richard #haler and Sherwin Rosen% B#he Calue o$ Sa+ing a Li$e- (+idence $rom the Labor MarketD in >.(. #erlecky0% ed.% Household =roduction and Consumption% >B(R% *";)% pp. 9): ?! . Barry R. Chiswick% B#he ($$ects o$ 4nemployment Compensation on a Seasonal &ndustryAgriculture%D 2ournal o$ =olitical (conomy% 2une *";9% pp. )"*:9! . Barry R. Chiswick% BRacial 8iscrimination in the Labor Market- A #est o$ Alternati+e Hypotheses%D 2ournal o$ =olitical (conomy. >o+ember *";?% pp. *%??!:*%?) . Stephen A. Aoodbury and Robert 6. Spiegelman% BBonuses to Aorkers and (mployers to Reduce 4nemploymentRandomi7ed #rials in &llinois%D American (conomic Re+iew% September *"<;. 2ohn M. Abowd and 3rley Ashen$elter% BAnticipated 4nemployment% #emporary Layo$$s% and Compensating Aage 8i$$erentialsD in Sherwin Rosen% Studies in Labor Markets% >B(R% *"<*. =I. @ob Mobili0y an# 5+o6ra/hic Mobili0y 9 ;++ks< ?(hrenberg and Smith% Chapter *!. 1Barry R. Chiswick% BAre &mmigrants Fa+orably Sel$:SelectedHD American (conomic Re+iew%

< May *"""% pp. *<*:*<). 12acob Mincer% BFamily Migration 8ecisions%D 2ournal o$ =olitical (conomy% 3ctober *";<% pp. ;E":;;E. 18onald =arsons% BSpeci$ic Human Capital- An Application to Guit Rates and Lay:o$$ Rates%D 2ournal o$ =olitical (conomy. >o+ember *"; % pp. *%* !:E?. 1Aba Schwart7% BMigration% Age and (ducation%D 2ournal o$ =olitical (conomy% August *";9% pp. ;!*:;*". Ann Bartel and 6eorge Bor0as% BMiddle Age 2ob Mobility- &ts 8eterminants and Conse'uencesD in Seymour L. Aol$bein% ed.% Men in =re:Retirement Fears% #emple 4ni+ersity *";;. =II. O0h+r Non/+c-niary E**+c0s o* ,-man Ca/i0al 91 s+ssion< 1(hrenberg and Smith% Chapter ;. 16ary S. Becker% BA #heory o$ the Allocation o$ #ime%D (conomic 2ournal% September *"9)% pp. E"?:)*;. 18uncan #homas% 2ohn Strauss and Maria:Helena Henri'ues% BHow 8oes MotherLs (ducation A$$ect Child Height%D 2ournal o$ Human Resources. Spring *""*% pp. *<?: **. 1Michael 6rossman . !!?/% BHousehold =roduction and Health%D Revie! of Economics of the "ousehold% *.E/ pp ??*:?E . 1Arleen Leibowit7% B&n:Home #raining and the =roduction o$ Children@s Human Capital%D Revie! of Economics of the "ousehold% *.E/ pp ?!):?*;. Robert #. Michael% BMeasuring >onmonetary Bene$its o$ (ducation- A Sur+ey%D Aater A. McMahon and #erry 6. 6eske% eds.% Financing (ducation- 3+ercoming &ne$$iciency and &ne'uity. *"< % pp. **":*E". 12ames =. Smith% BHealthy Bodies and #hick Aallets- #he 8ual Relation Between Health and (conomic StatusD 2ournal o$ (conomic =erspecti+es% *?. /% Spring *"""% pp. *E):*99. =hilip Farrell and Cictor R. Fuchs% BSchooling and Health- #he Cigarette Connection%D 2ournal o$ Health (conomics% 8ecember *"< % pp. *;: ?!. 8onald S. Ienkel% BHealth Beha+ior% Health Inowledge and Schooling%D 2ournal o$ =olitical (conomy% Col. ""% >o. % *""*% pp. <;:?!). 6ary S. Becker% A #reatise on the Family% Har+ard% *"< .