Subject: Labour Economics

Introduction to Labour Economics and Methodology

Teaching Staff: Pedro Goulart
ISCSP-UTL 2011/2012

Overview of today
My presentation Your presentation Overview of the course Methodology

Me (Pedro Goulart)
Assistant Professor (invited) PhD (Erasmus University Rotterdam, 2011) Research Interests: Dev. Economics, Economics of Education, Economic History, Labour Economics Key Publications:
Goulart, P; Bedi, A. 2008. "Child labour and educational success in Portugal", Economics of Education Review 27, 5: 575 - 587. Goulart, P.; Bedi, A. 2011. "The impact of interest in school on educational success in Portugal", Bonn: IZA Discussion Paper No. 5462.

CV: http://www.degois.pt/visualizador/curriculum.jsp?key=2923736152037316
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Your turn

Programme 1
1. Introduction to Labour Economics and Methodology 2. Labour Supply 3. Labour Demand 4. Labour Market Models and Unemployment 5. Wage Determination Process 6. Migrations and Worker Mobility
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Programme 2
7. Economics of Education 8. Economics of the Family 9. Child labour 10. Discrimination in the Labour Market 11. Employment policies and institutions

Evaluation and bibliography

Evaluation 60% exam; 40% group work. Who attends the debate is awarded 0,5 points. Further bonus from participation (of value) during classes. Bibliography Borjas, G.J. (2012) Labor Economics, McGraw-Hill/Irwin. Cahuc, P. and A. Zylberberg (2004) Labor Economics, MIT Press. Ehrenberg, R.G. and R.S. Smith (2011) Modern Labor Economics: Theory and Public Policy (11th Edition), Prentice Hall.
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Economics and Labour Economics

Describing how it functions Positive Economics (Judgment of value Normative Economics) Produo (para satisfao das necessidades)
Recursos * Agentes = Produo (bens e servios)

Afectao de recursos depende de diferentes mercados Labour Economics (Content)

Mercado de trabalho Comparative advantage and specialisation

Applied economics (with theoretical background)

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Methodology
Abstraction, trends and comparison
Simplify, but not simplistic Segment for analysis Ceteris paribus
http://www.youtube.com/watch?feature=player_embedded&v=Ahg6qcgoay4

Tools
Mathematics Graphs Regression analysis

Intuition
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Example: Consumption and Income

Causality
From theory Before and after (nothing else changes?)

Selection effects
Counterfactual
Control/reference group Regression analysis *

Unobserved characteristics
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Regression analysis
Adjust trendline to relationship between variables Minimizing the distance from the observations to the line (how to measure the distance?)
summing the residuals for each observation (cancels out?) absolute values of the residuals square each residual and finally sum them (higher weight to a higher distance from the line) (Ordinary Least Squares estimation, OLS)

More than one variable (Savings) Ceteris paribus Goodness of fit (R-squared) = explained variation/total
^

(Y i Y ) /(Yi

Y)
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Readings
Ravallion, M. (2001) The Mystery of the Vanishing Benefits: An Introduction to Impact Evaluation, World Bank Economic Review 15(1): 115-140.

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Fim
Por hoje...

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1.1 What is Economics?

Relacionamento entre diferentes elementos
Recursos e Agentes Produo (para satisfao das necessidades)
Recursos * Agentes = Produo (bens e servios)

Consumidores retiram utilidade da produo Diferentes constrangimentos

Recursos escassos (em relao s necessidades):
Necessidade de escolher prioritarizar! (Grf 1)

Uso do tempo (ex. custo de oportunidade: estudar vs. trabalhar)

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1.3 Eficincia Pareto

ptimo de Pareto (Grf 2) Na Fronteira de Possibilidades de Produo
No se pode produzir mais de um bem sem produzir menos do outro bem;

Objectivo: maior eficincia produtiva No se refere equidade ou justia da redistribuio da produo pelos agentes Tb usado na avaliao de polticas pblicas
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1.4 Mercado de concorrncia perfeita (I)

Mercados competitivos
Produtos homgeneos Compradores e vendedores sem poder de mercado (no influenciam o preo);
ex: feira

Outros (ex.):
Informao perfeita (preos, qualidade) Retornos de escala no crescentes Entrada (e sada) livre no mercado (ex.)
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1.4 Mercado de concorrncia perfeita (III)

Ao nvel macro
Ao nvel agregado do mercado (Grf 5)
As curvas da procura e da oferta Oferta = procura de um bem Equilbrio parcial

Todos os mercados esto interligados

Um mercado influencia o outro (ex: rigidez no mercado de trabalho) Equilbrio geral
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1.4 Mercado de concorrncia perfeita (IV)

Em suma
Mecanismo de preos (1) Direitos de propriedade bem definidos (2) (1)+(2)=Eficincia econmica (mo invisvel)
eficincia na produo (minimizar custos, Q onde CMg=CM) afectao eficiente (maximizar bem-estar, CMg=RMg) Na Fronteira de Possibilidades Produo (condio suficiente mas no necessria)

Crticas ao modelo e hipteses

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