Labour Economics and Policy Evaluation
A.Y. 2022/2023
Learning objectives
The course is designed to provide a rigorous introduction to the conceptual apparatus of modern labour economics. Its objective is to equip students with the basic analytical tools required to read and understand contemporary literature in both theoretical and applied labour economics. Each topic will be approached starting from some theorical models, aiming to explain the behaviour of economic agents (workers, firms, etc.) and to obtain testable implications, and then illustrated through some empirical applications taken from the academic literature, mainly using microeconometric techniques.
Expected learning outcomes
After the course, students must be able to apply economic reasoning to understand the functioning of labour markets and how they are influenced by public policies or changes in economic fundamentals. This theoretical knowledge will provide students with the necessary background to interpret the results of empirical studies that use microeconometric techniques to study labour market issues or to evaluate labour market policies.
Lesson period: First trimester
Assessment methods: Esame
Assessment result: voto verbalizzato in trentesimi
Single course
This course cannot be attended as a single course. Please check our list of single courses to find the ones available for enrolment.
Course syllabus and organization
Single session
Responsible
Lesson period
First trimester
Course syllabus
Attending students
The counterfactual and causality
Recap of Ordinary Least Squares (OLS) and causality
Randomized Control Trials (RCTs)
Instrumental Variables (IVs)
The Local Average Treatment Effects (LATE) of IVs
Difference-in-Differences (DID)
Regression Discontinuity Design (RDD)
Recent evolutions of policy evaluation methods
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Non-attending students
The neoclassical model of labor supply [chapter 1]
Household and female labor supply [chapter 1]
Estimation of labor supply [chapter 1 and academic articles]
Labor demand [chapter 2]
Estimation of labor demand [chapter 2 and academic articles]
Competitive equilibrium and compensating wage differentials and discrimination, with applications [chapters 3 and 8 and academic articles]
Education and Human capital [chapter 4]
Estimation of the returns to education [chapter 4 and academic articles]
Technological progress, globalization and inequalities, with applications [chapters 10-11 and academic articles]
Labor market policies [chapter 14]
Examples of evaluation of labor market policies and reforms [academic articles]
The programme may be subject to some year-to-year changes. Please check the ARIEL website for the updated programme.
The counterfactual and causality
Recap of Ordinary Least Squares (OLS) and causality
Randomized Control Trials (RCTs)
Instrumental Variables (IVs)
The Local Average Treatment Effects (LATE) of IVs
Difference-in-Differences (DID)
Regression Discontinuity Design (RDD)
Recent evolutions of policy evaluation methods
=====================================
Non-attending students
The neoclassical model of labor supply [chapter 1]
Household and female labor supply [chapter 1]
Estimation of labor supply [chapter 1 and academic articles]
Labor demand [chapter 2]
Estimation of labor demand [chapter 2 and academic articles]
Competitive equilibrium and compensating wage differentials and discrimination, with applications [chapters 3 and 8 and academic articles]
Education and Human capital [chapter 4]
Estimation of the returns to education [chapter 4 and academic articles]
Technological progress, globalization and inequalities, with applications [chapters 10-11 and academic articles]
Labor market policies [chapter 14]
Examples of evaluation of labor market policies and reforms [academic articles]
The programme may be subject to some year-to-year changes. Please check the ARIEL website for the updated programme.
Prerequisites for admission
Students are expected to be already familiar with demand and production theory, acquired in the "Advanced Microeconomics and Macroeconomics" (DSE, MEF) or "Advanced Microeconomics" (EPS) courses, and with the main empirical strategies used to assess causality in econometrics (i.e. taught in the DSE course "Micro-econometrics, Causal Inference and Time Series Econometrics" or the EPS course "Empirical Methods for Economics and Policy Evaluation"). Knowledge of statistical/econometric software packages such as R or STATA is needed to complete the (voluntary but strongly recommended for attending students) paper assignment and class assignments. (Some basic knowledge of the STATA software can be acquired through the EPS "Advanced Computer Skills" course, from the 2020-21 edition.)
Teaching methods
Attending students
For attending students the course mainly consists of lectures teaching the main empirical methods used for causal inference and policy evaluation. For each topic, methodological lectures will be accompanied by more applied sessions in which students will replicate published empirical work from economic researchers.
Non-attending students
The course will consist of (recorded) frontal lectures teaching both labour economics theory and the basic methodologies for causal inference and policy evaluation. Given the time constraint and the way the course will be assessed (a written exam), less focus will be devoted to applications compared to the lectures for attending students.
For attending students the course mainly consists of lectures teaching the main empirical methods used for causal inference and policy evaluation. For each topic, methodological lectures will be accompanied by more applied sessions in which students will replicate published empirical work from economic researchers.
Non-attending students
The course will consist of (recorded) frontal lectures teaching both labour economics theory and the basic methodologies for causal inference and policy evaluation. Given the time constraint and the way the course will be assessed (a written exam), less focus will be devoted to applications compared to the lectures for attending students.
Teaching Resources
Attending students
Causal inference and policy Evaluation:
- Angrist, J. D., & Pischke, J. S. (2008). Mostly harmless econometrics. In Mostly Harmless Econometrics. Princeton university press.
- Scientific papers posted on the ARIEL website.
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Non-attending students
Labour Economics:
- Pierre Cahuc, Stéphane Carcillo, and André Zylberberg (2014), Labor Economics, Second Edition, The MIT Press. [Chapters specified in the syllabus]
Causal inference and policy Evaluation:
- Angrist, J. D., & Pischke, J. S. (2008). Mostly harmless econometrics. In Mostly Harmless Econometrics. Princeton university press.
Policy Evaluation:
Angrist, J. and Pishke, J.-S. (2009), Mostly Harmless Econometrics, Princeton University Press.
Academic papers listed in the ARIEL course website.
Causal inference and policy Evaluation:
- Angrist, J. D., & Pischke, J. S. (2008). Mostly harmless econometrics. In Mostly Harmless Econometrics. Princeton university press.
- Scientific papers posted on the ARIEL website.
===========================================
Non-attending students
Labour Economics:
- Pierre Cahuc, Stéphane Carcillo, and André Zylberberg (2014), Labor Economics, Second Edition, The MIT Press. [Chapters specified in the syllabus]
Causal inference and policy Evaluation:
- Angrist, J. D., & Pischke, J. S. (2008). Mostly harmless econometrics. In Mostly Harmless Econometrics. Princeton university press.
Policy Evaluation:
Angrist, J. and Pishke, J.-S. (2009), Mostly Harmless Econometrics, Princeton University Press.
Academic papers listed in the ARIEL course website.
Assessment methods and Criteria
Attending students
Attending students have to write an empirical paper (either single-authored or in groups of 2-3 students) on labour market or policy evaluation issues in which they use the econometric methods learned during the course.
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Non-attending students
The course is assessed through a final written exam, which mainly consists of open and multiple-choice questions.
Attending students have to write an empirical paper (either single-authored or in groups of 2-3 students) on labour market or policy evaluation issues in which they use the econometric methods learned during the course.
=================================
Non-attending students
The course is assessed through a final written exam, which mainly consists of open and multiple-choice questions.
Educational website(s)
Professor(s)
Reception:
Unless otherwise notified (published here): Tuesday 18:00-19:30; Wednesday 18:00-19:30. On appointment.
MS Teams or in person (office nr. 21 DEMM)