labor economic research paper

Spring 2014

Economics 385 Project

Date on last day of class: April 30, 2014 (MW class), May 1, 2014 (TR class) The Journal of Economic Perspectives is a quarterly journal that publishes “symposia” on various subjects.1 Each symposium consists of a small number of articles written by economists for a general audience that collectively attempt to illustrate the profession’s understanding of one subject. Your goal in the assignment is to summarize what the field of economics knows about one topic in labor economics. As in the symposia, do it in a way that someone who has not taken ECON 385 (but is aware of current events and “reads the news”) would understand.

1. Selecting a topic. a. The American Economic Association has a taxonomy for journal articles called

the JEL Codes. Since this is a labor economics course, we will confine our interest that section (labor is J)of this list (shown on the attached pages).

b. Peruse the JEL Codes and a source such as the Borjas textbook. This will give you an idea of what things are classified as “labor economics”. It is a fairly inclusive subject, but there are still some topics that will make your research difficult because they are insufficiently related to this field. E.g., if your idea does not even appear in the index of Borjas, it might not be the optimal choice.

c. Decide specifically what you want to write about. Is there something that you have had an enduring intellectual interest in? Are legislators debating a law that could have significant consequences for labor markets? Is there a section in the textbook that really caught your interest and you want to learn more about it?

d. Tips. i. Emphatically, the topic must be specific. “Labor supply” has had at least

a thousand papers written on it. So has “human capital” and “unemployment”. You don’t want to read 1000 papers (or even a fraction of them) and I don’t want to read a summary of that many papers.

ii. Here’s how specific it should be. An appropriate topic will have 10 to 20 papers written on the subject in academic journals. You should only discuss the most relevant ¼ to ½ of them in your paper. I expect no more than 5 citations of academic papers; if you have more, you’re sacrificing too much quality for quantity.

iii. Try to use a topic covered generally in class and explore an “offshoot” that is more specific. For example, “labor supply” could be broken down into sub-topics like: “female labor supply post 1960 in the U.S.”, “the effect of divorce on female labor supply”, or “teen labor supply and academic performance”. These topics are not significant enough to merit a whole lecture, but significant enough for an individual researcher to explore.

iv. If you have any doubts about the validity of your topic, consult the instructor before proceeding to write a first draft. You will not have to

1 http://www.aeaweb.org/jep/issues.php

ECON 385: Labor Economics. Ben Van Kammen.

Spring 2014

worry whether you have a good topic if you gain explicit approval from me in advance. This is not required, but it will make your life easier.

v. Choose something that is interesting—from, say, a public policy standpoint. You should be able to explain why a general audience should care about your conclusions.

vi. Cruising around the blogosphere can help locate evidence that people care about the topic and how they view it. You can even cite a couple of posts by choice bloggers if it helps establish the topic’s relevance.

Present your topic to the instructor for approval on or before Friday March 7. This counts toward your grade on the paper (see document about scoring on Katalyst). When pitching your topic, it would be a good idea to identify 1 academic paper and 1 popular media article that establish both scholarly and general interest in your topic.

2. Perform the research. a. You should identify a couple of (written by economists) sources in the process of

choosing your topic. Read them as well as any of the anteceding papers they cite frequently.

b. To establish the relevance of your paper, read the current periodicals and blogs. The instructor can suggest examples if you are unsure where to begin.

c. The Borjas textbook may be useful to help you explain the economic theories related to your topic.

d. You should be trying to gather a representative sample of what economists know about the subject from empirical observation and how they explain the findings with theory.

e. The instructor will demonstrate general search methods in class and be available to confer with you about finding the best possible sources for your paper.

3. Writing the review.

a. There is neither a page number nor word number requirement for this assignment. It should be as long as necessary and as short as possible. Here is what is necessary.

b. An introduction that identifies the topic, explains its place among the overall labor economics literature (think “what textbook chapter would this be in?”), and motivates the reader to continue through the rest of the paper. “Why should I care?” is a question you want to answer as early in the paper as possible. This means giving the reader a glimpse of how public policy or our economic welfare hinges on the findings you will present.

c. One can assume that the reader is sufficiently interested that he is reading a symposium about Labor [fill in the blank], but you have to explain why the facet you are writing about is so important.

d. Identify the relevant theoretical predictions about the topic, e.g.: “The compensating wage differential for a job requiring work-related travel will be positive if workers consider travel a disamenity. However if some workers enjoy traveling—and they are the only ones who accept the traveling jobs—the compensating differential could be negative, as well.”

ECON 385: Labor Economics. Ben Van Kammen.

Spring 2014

i. Explain any jargon that is necessary to your review so someone not acquainted with the literature can understand.

ii. You don’t have to write on the same mathematical level as the authors of academic journal articles, but you should be able to find the key assumptions of their models and the testable implications. In terms of mathematical rigor, the Borjas text is a good target.

e. Summarize any empirical results, i.e., from academic articles, a textbook, or a report by a statistical agency such as the BLS, that test the theory. Explain the approach, (the kind of data used and/or method of estimation) applied by economists who study this topic. Briefly suggest a couple reasons why the approach is so useful for empirical evaluation.

i. If this theory is true, what would you expect to observe in the real world? Did that happen or not?

f. A conclusion that summarizes what the author has learned from performing the research

4. General instructions for the final submission of the literature review.

a. As a minimum for a good grade, the caliber of written communication will befit a college graduate. A paper that is incomprehensible (because of poor sentence structure, grammar, using words out of context, or subject-verb disagreement, et al.) will earn you no points. I will not (nor will any reader) waste time trying to decipher poorly written paragraphs. I have to read over 100 papers from the class, and I reserve the right to award a zero to any paper that is too hard to read for grammatical or mechanical reasons.

i. If you are concerned about your writing ability, visit the writing center.2 Get a friend, sibling, or co-worker to read your paper and proofread it. Run spellcheck (!) and search your paper for incorrect homonyms (spellcheck won’t find these). Do whatever it takes to avoid handing in a poorly written paper.

b. Cite your sources in the text, (Author year) and include a works cited page. c. Use active voice. d. Avoid the following phrases: “I think”, “I believe”, “I feel”. You’re writing the

thing; you wouldn’t be writing it if you didn’t think it. e. Double space your submission.

i. It should go without saying, but type your assignment and hand in a printed paper copy. Hand-written submissions are not acceptable.

f. Generally do all the other good things you learned in English composition classes. Remember it’s your job to communicate your thoughts to the reader—not the reader’s job to divine what you are trying to say.

5. Overall the paper comprises 30% of the course grade.

2 http://owl.english.purdue.edu/writinglab/servicesoverview

ECON 385: Labor Economics. Ben Van Kammen.

Spring 2014

Attachment: JEL Codes

J - Labor and Demographic Economics J1 - Demographic Economics J11 - Demographic Trends, Macroeconomic Effects, and Forecasts J12 - Marriage; Marital Dissolution; Family Structure; Domestic Abuse J13 - Fertility; Family Planning; Child Care; Children; Youth J14 - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market

Discrimination J15 - Economics of Minorities, Races, and Immigrants; Non-labor Discrimination J16 - Economics of Gender; Non-labor Discrimination J17 - Value of Life; Forgone Income J18 - Public Policy J2 - Demand and Supply of Labor J21 - Labor Force and Employment, Size, and Structure J22 - Time Allocation and Labor Supply J23 - Labor Demand J24 - Human Capital; Skills; Occupational Choice; Labor Productivity J26 - Retirement; Retirement Policies J28 - Safety; Job Satisfaction; Related Public Policy J3 - Wages, Compensation, and Labor Costs J31 - Wage Level and Structure; Wage Differentials J32 - Nonwage Labor Costs and Benefits; Private Pensions J33 - Compensation Packages; Payment Methods J38 - Public Policy J4 - Particular Labor Markets J41 - Labor Contracts J42 - Monopsony; Segmented Labor Markets J43 - Agricultural Labor Markets J44 - Professional Labor Markets; Occupational Licensing J45 - Public Sector Labor Markets J47 - Coercive Labor Markets J48 - Public Policy J5 - Labor–Management Relations, Trade Unions, and Collective Bargaining J51 - Trade Unions: Objectives, Structure, and Effects J52 - Dispute Resolution: Strikes, Arbitration, and Mediation; Collective Bargaining J53 - Labor–Management Relations; Industrial Jurisprudence J54 - Producer Cooperatives; Labor Managed Firms; Employee Ownership J58 - Public Policy J6 - Mobility, Unemployment, and Vacancies

ECON 385: Labor Economics. Ben Van Kammen.

Spring 2014

J61 - Geographic Labor Mobility; Immigrant Workers J62 - Job, Occupational, and Intergenerational Mobility J63 - Turnover; Vacancies; Layoffs J64 - Unemployment: Models, Duration, Incidence, and Job Search J65 - Unemployment Insurance; Severance Pay; Plant Closings J68 - Public Policy J7 - Labor Discrimination J71 - Discrimination J78 - Public Policy J8 - Labor Standards: National and International J81 - Working Conditions J82 - Labor Force Composition J83 - Workers’ Rights J88 - Public Policy If you are unsure what each description means, go to the AEA’s website to retrieve a more thorough explanation of the kind of papers that would fit under a given JEL Code.3

3 http://www.aeaweb.org/jel/guide/jel.php

ECON 385: Labor Economics. Ben Van Kammen.