Introduction to Labor Economics p. 1
An Economic Story of the Labor Market p. 2
The Actors in the Labor Market p. 3
Why Do We Need a Theory? p. 7
The Organization of the Book p. 10
Summary p. 11
Key Concepts p. 11
Review Questions p. 11
Web Links p. 12
An Introduction to Regression Analysis p. 12
Labor Supply p. 21
Measuring the Labor Force p. 22
Basic Facts about Labor Supply p. 24
The Worker's Preferences p. 27
The Budget Constraint p. 31
The Hours of Work Decision p. 33
To Work or Not to Work? p. 40
The Labor Supply Curve p. 42
Estimates of the Labor Supply Elasticity p. 45
Labor Supply of Women p. 50
Policy Application: Welfare Programs and Work Incentives p. 55
Policy Application: The Earned Income Tax Credit p. 61
Theory at Work: Dollars and Dreams p. 40
Theory at Work: Winning the Lotto Will Change Your Life p. 43
Theory at Work: Work and Leisure in Europe and the United States p. 48
Theory at Work: The Laffer Curve p. 51
Theory at Work: Female Labor Supply and Economic Development p. 54
Summary p. 65
Key Concepts p. 66
Review Questions p. 66
Problems p. 66
Selected Readings p. 68
Web Links p. 68
Topics in Labor Supply p. 69
Labor Supply over the Life Cycle p. 70
Labor Supply over the Business Cycle p. 75
Retirement p. 78
Policy Application: The Decline in Work Attachment among Older Workers p. 82
Household Production p. 88
Fertility p. 94
Theory at Work: Cabbies in New York City p. 75
Theory at Work: The Notch Babies p. 83
Theory at Work: Poor Relief and Fertility p. 95
Theory at Work: Not-So-Fast Times at Ridgemont High p. 100
Summary p. 100
Key Concepts p. 101
Review Questions p. 103
Problems p. 101
Selected Readings p. 103
Web Links p. 104
Labor Demand p. 105
The Production Function p. 106
The Employment Decision in the Short Run p. 109
The Employment Decision in the Long Run p. 115
The Long-Run Demand Curve for Labor p. 119
The Elasticity of Substitution p. 126
Policy Application: Affirmative Action and Production Costs p. 127
Marshall's Rules of Derived Demand p. 130
Factor Demand with Many Inputs p. 133
Overview of Labor Market Equilibrium p. 135
Policy Application: The Employment Effects of Minimum Wages 13 4-11 Adjustment Costs and Labor Demand p. 147
Rosie the Riveter as an Instrumental Variable p. 154
Theory at Work: California's Overtime Regulations and Labor Demand p. 125
Theory at Work: The Minimum Wage and Puerto Rican Migration p. 145
Theory at Work: Work-Sharing in Germany p. 152
Summary p. 159
Key Concepts p. 159
Review Questions p. 160
Problems p. 160
Selected Readings p. 162
Web Links p. 162
Labor Market Equilibrium p. 163
Equilibrium in a Single Competitive Labor Market p. 164
Competitive Equilibrium across Labor Markets p. 166
Policy Application: Payroll Taxes and Subsidies p. 171
Policy Application: Payroll Taxes versus Mandated Benefits p. 178
Policy Application: The Labor Market Impact of Immigration p. 181
The Economic Benefits from Immigration p. 193
The Cobweb Model p. 196
Noncompetitive Labor Markets: Monopsony p. 199
Noncompetitive Labor Markets: Monopoly p. 205
Theory at Work: The Intifadah and Palestinian Wages p. 165
Theory at Work: The Clinton Health Care Program p. 175
Theory at Work: The Great Black Migration p. 194
Summary p. 207
Key Concepts p. 208
Review Questions p. 208
Problems p. 209
Selected Readings p. 211
Web Links p. 212
Compensating Wage Differentials p. 213
The Market for Risky Jobs p. 214
The Hedonic Wage Function p. 220
Policy Application: How Much Is a Life Worth? p. 224
Policy Application: Safety and Health Regulations p. 227
Compensating Differentials and Job Amenities p. 230
Policy Application: Health Insurance and the Labor Market p. 235
Theory at Work: The Value of Life on the Interstate p. 226
Theory at Work: Workers' Compensation May Be Hazardous to Your Health p. 230
Summary p. 238
Key Concepts p. 238
Review Questions p. 239
Problems p. 239
Selected Readings p. 242
Web Links p. 242
Human Capital p. 243
Education in the Labor Market: Some Stylized Facts p. 244
Present Value p. 246
The Schooling Model p. 246
Education and Earnings p. 253
Estimating the Rate of Return to Schooling p. 257
Policy Application: School Construction in Indonesia p. 260
Policy Application: School Quality and Earnings p. 261
Do Workers Maximize Lifetime Earnings? p. 265
Schooling as a Signal p. 268
Post-School Human Capital Investments p. 274
On-the-Job Training p. 275
On-the-Job Training and the Age-Earnings Profile p. 279
Policy Application: Evaluating Government Training Programs p. 284
Theory at Work: Can We Afford to Improve the Skills of High School Dropouts? p. 262
Theory at Work: Is the GED Better Than Nothing? p. 273
Theory at Work: Earnings and Substance Abuse p. 283
Summary p. 287
Key Concepts p. 288
Review Questions p. 288
Problems p. 289
Selected Readings p. 291
Web Links p. 292
The Wage Structure p. 293
The Earnings Distribution p. 294
Measuring Inequality p. 296
The Wage Structure: Basic Facts p. 299
Policy Application: Why Did Wage Inequality Increase? p. 302
The Earnings of Superstars p. 311
Inequality across Generations p. 314
Theory at Work: Computers, Pencils, and the Wage Structure p. 308
Theory at Work: Rock Superstars p. 313
Summary p. 317
Key Concepts p. 317
Review Questions p. 317
Problems p. 318
Selected Readings p. 320
Web Links p. 320
Labor Mobility p. 321
Geographic Migration as a Human Capital Investment p. 322
Internal Migration in the United States p. 323
Family Migration p. 329
Immigration in the United States p. 332
Immigrant Performance in the U.S. Labor Market p. 334
The Decision to Immigrate p. 340
Policy Application: Intergenerational Mobility of Immigrants p. 346
Job Turnover: Facts p. 351
The Job Match p. 354
Specific Training and Job Turnover p. 356
Job Turnover and the Age-Earnings Profile p. 358
Theory at Work: Migration and EU Expansion p. 328
Theory at Work: Power Couples p. 332
Theory at Work: Visas Available (If You Pass a Test or Pay Up!) 344 Theory at Work: Hey Dad, My Roommate Is So Smart, I Got a 4.0 GPA p. 350
Theory at Work: Health Insurance and Job-Lock p. 355
Summary p. 360
Key Concepts p. 361
Review Questions p. 361
Problems p. 362
Selected Readings p. 364
Web Links p. 364
Labor Market Discrimination p. 365
Race and Gender in the Labor Market p. 366
The Discrimination Coefficient p. 367
Employer Discrimination p. 368
Employee Discrimination p. 375
Customer Discrimination p. 376
Statistical Discrimination p. 378
Experimental Evidence on Discrimination p. 382
Measuring Discrimination p. 385
Policy Application: Determinants of the Black-White Wage Ratio p. 388
Discrimination against Other Groups p. 395
Policy Application: Determinants of the Female-Male Wage Ratio p. 397
Theory at Work: Beauty and the Beast p. 375
Theory at Work: Customer Discrimination and the NBA p. 379
Theory at Work: Discrimination on the Weakest Link p. 383
Theory at Work: Shades of Black p. 395
Theory at Work: Orchestrating Impartiality p. 400
Summary p. 405
Key Concepts p. 405
Review Questions p. 405
Problems p. 406
Selected Readings p. 409
Web Links p. 409
Labor Unions p. 410
Unions: Background and Facts p. 411
Determinants of Union Membership p. 415
Monopoly Unions p. 421
Policy Application: Unions and Resource Allocation p. 423
Efficient Bargaining p. 425
Strikes p. 431
Union Wage Effects p. 437
The Exit-Voice Hypothesis p. 443
Policy Application: Public-Sector Unions p. 445
Theory at Work: The Rise and Fall of PATCO p. 420
Theory at Work: The Cost of Labor Disputes p. 434
Theory at Work: Airline Deregulation and the Wages of Airline Mechanics p. 443
Theory at Work: Lawyers and Arbitration p. 447
Summary p. 448
Key Concepts p. 449
Review Questions p. 449
Problems p. 450
Selected Readings p. 452
Web Links p. 452
Incentive Pay p. 453
Piece Rates and Time Rates p. 454
Tournaments p. 461
Policy Application: The Compensation of Executives p. 466
Work Incentives and Delayed Compensation p. 469
Efficiency Wages p. 473
Theory at Work: Windshields by the Piece p. 458
Theory at Work: Incentive Pay Gets You to LAX on Time p. 462
Theory at Work: Playing Hard for the Money p. 465
Theory at Work: Did Henry Ford Pay Efficiency Wages? p. 477
Summary p. 482
Key Concepts p. 482
Review Questions p. 482
Problems p. 483
Selected Readings p. 485
Web Links p. 485
Unemployment p. 486
Unemployment in the United States p. 487
Types of Unemployment p. 493
The Steady-State Rate of Unemployment p. 494
Job Search p. 496
Policy Application: Unemployment Compensation p. 503
The Intertemporal Substitution Hypothesis p. 510
The Sectoral Shifts Hypothesis p. 512
Efficiency Wages p. 513
Implicit Contracts p. 517
Policy Application: The Phillips Curve p. 518
Policy Application: Why Does Europe Have High Unemployment? p. 523
Theory at Work: Jobs and Friends p. 497
Theory at Work: Cash Bonuses and Unemployment p. 505
Theory at Work: The Benefits of UI p. 510
Summary p. 525
Key Concepts p. 526
Review Questions p. 526
Problems p. 527
Selected Readings p. 529
Web Links p. 530
Indexes p. 531
Name Index p. 531
Subject Index p. 536