1. Introduction to Labour Economics
KAT.TAL.322 Advanced Course in Labour Economics
Course structure
Instructor: Nurfatima Jandarova (nurfatima.jandarova@tuni.fi)
Classes: 90 min lectures twice a week on Wed and Thu 14:00 - 16:00
No class on 21 March!
8 lectures + 2-3 classes devoted to final assessment
All course information on Moodle
Check classrooms on Sisu calendar
No office hours (contact by email)
Final assessment
Short presentation of a research proposal
Choose a topic related to labour economics
- Reading list is a good place to start
- Recent literature surveys (e.g., Journal of Economic Literature)
- Opinion columns (e.g., VoxEU)
Individual or groups of 2-3 students
20-25 min presentations at the end of April
Requirements to research proposals
- Clear research question
- Importance and contribution
Theoretical
- Clear exposition of model
- Comparative statics/predictions/simulations
- ⭐ Plan for testing with the data
Empirical
- Potential dataset (sample, variables)
- Empirical strategy (challenges, assumptions)
- ⭐ Interpretation/potential mechanisms
Examples:
RQ: do prestigious universities boost earnings of their graduates?
Dataset sample: survey data vs wealth of top 1%
Potential mechanism: class size effect via higher density of teacher resources or peer effects?
Tips
Choose a topic early (weeks 1-2)!
Select one published paper as a “template”1
Some useful resources:
Labour Economics
What is Labour Economics?
Labour economics studies how labour markets work.
Main actors in the labour market:
workers (sellers)
firms (buyers)
government
Why study Labour Economics?
Labour market is the largest market.
- Work accounts for ~30% of waking hours
- Employees account for 70-90% of employment
- Labour income accounts for ~60% of total output
Ask what they think
Positive vs Normative Economics (do vs should)
Topics in labour economics
Short poll: examples of labour market topics from students
Example: labour supply
Female labour force participation
Source: International Labor Organization (ILO) and Olivetti (2013)
Main question: what could have driven the rise? Focus on worker decision.
What is the role of education? Technological shift? Wars?
Consequences for
gender pay gap
?
Example: labour demand
Computerisation and automation
Source: Statistics Finland (2024)
50% of jobs face high risk of computerisation
Main question: do AI firms fire a lot of people?
Computerisation and labour demand
Atlas of jobs and task composition
Product demand and labour demand
Wage polarisation
Example: employment
Minimum wages
Main question: should Finnish government introduce a min wage at €500/month? €3000/month?
Example: human capital
University expansion
Main question: can these levels mean that workers are overeducated? is it bad if people are overeducated?
Returns to education - cause or consequence?
How should it be financed?
Composition of graduates
Inequality
Overeducation
Example: inequality
Main question: how inequality can affect market structure?
Gender inequality, education inequality
Employment opportunities, wages, job security
Role of institutions: unions, employment protections, gig economy
In turn affects shape of future institutions, politics
Size of pie, can people realise their full potential?
Podcast on inequality: https://ifs.org.uk/articles/when-and-why-should-we-care-about-inequality
Also labour economics topics
Overview of lectures
References
Footnotes
Good examples AEJ Best Paper awards↩︎