PP 5288 LABOUR MARKET POLICY ISSUES
Semester 1 AY2015-16
Lecturer: Assoc Prof Hui Weng Tat
This course explains how the labour market works and studies the key issues confronting workers, employers and government in an increasingly globalized labour maket. It will examine how public policy and institutions shape the arrangements, terms and conditions under which individuals supply and firms demand labor. The module will highlight important trends and developments in the world of work and examine current labour market issues. Major topics covered include labour force participation/nonparticipation, role of labour market institutions, education and training policies, labour migration, productivity and pay linkages, income inequality, inclusive growth policies and other challenges arising from globalisation.
After completing this course, students should be able to:
o know the fundamental features of a labour market and key factors that drive labor market trends
o understand the underlying behaviour of individuals, households and employers in the supply of and demand for labour services
o apply relevant concepts and knowledge to explain the determinants of labour market outcomes
o evaluate policy issues concerning the labour market and formulate opinions on appropriate policy responses to labour market issues
o use appropriate frameworks and tools to understand and contribute to policy discussions concerning the labour market
Ronald Ehrenberg and Robert Smith (ES), Modern Labour Economics: Theory and Public Policy, 12th edition, Pearson Education Global Edition,
Additional articles will be referred to during the course.
I. Overview of the Labour Market
- Concepts and definitions
- Labour market facts and trends
- Labour market policies and institutions
ES : Chapt 2.
. Labor Supply and the Decision to Work
- Work-leisure decisions
- Participation & non-participation
- Earned income tax credit and workfare schemes
- Home production, children, child-care, fertility
- Retirement decision
ES : Chapt 6, 7;
Mark Pearson and Stefano Scarpetta 2000, “What do we know about making policies to make work pay ?”, OECD Economic Studies No. 31.
Koh Tsin Yen 2011, Workfare in Singapore, Singapore Civil Service College case study, http://www.cscollege.gov.sg/Knowledge/Pages/Workfare-in- Singapore.aspx
Reuben Gronau 1977, “Leisure, Home Production, and Work-the Theory of the Allocation of Time Revisited”, The Journal of Political Economy, Vol. 85, No. 6, pp. 1099-1123.
. The Employment of Labour
- Determinants of employment decisions of firms
- Non-wage costs & the employment-hours mix
- Adjustment costs and employment
- Labour market effects of taxes, subsidies and minimum wage
- Labour demand policies
- Technology and the future of jobs
ES : Chapt 3, 4, 5.
Bruce Kaufman 2009, “Promoting Labour Market Efficiency and Fairness through a Legal Minimum Wage: The Webbs and the Social Cost of Labour”, British Journal of Industrial Relations June, pp. 306–326.
W T Hui 2013, “Economic Growth and Inequality in Singapore: The Case for a
Minimum Wage”, International Labour Review, Vol 152, No. 1, pp. 107-123.
IV. Human Capital Investment: Education and Training
- Human capital policies
- Investment in education and returns to education
- Financing higher education
- Education and economic growth
- Types of training and its financing
- Implications of training
ES : Chapt 9
Eric Hanushek and Ludger Woessmann 2007, “Education Quality and
Economic Growth” World Bank.
Joaquim O. Martins, Romina Boarini, Hubert Strauss and Christine de la Maisonneuve 2009 “The Policy Determinants of Investment in Tertiary Education”, OECD Journal: Economic Studies.
V. Labour Migration
- Determinants of labour migration
- Impact of migration at origin and destination
- Brain drain and brain gains consequences and policy
E S : Chapt 10
George Borjas, Labor economics, McGraw-Hill, 2009, 5th Edition, Chapter 9
Christiane Kuptsch and Philip L. Martin 2011, “Actors and factors in the internationalization of labour markets”, in Christiane Kuptsch (ed) The internationalization of labour markets, ILO.
UNDP Human Development Report 2009, Overcoming barriers: Human mobility and development, Chapt 4 “Impacts at origin and destination” and Chapt 5 “Policies to enhance human development outcomes” UNDP (http://hdr.undp.org/en/reports/global/hdr2009/).
ILO 2010 International Labour Migation: A rights-based approach, Chapter 2 “Migration: Growth and development impacts in countries of origin and destination”, ILO.
VI. Earnings Inequality and Labour Market Impact of Globalisation
- Earnings inequality trends and implications
- International trade and labour adjustments
- Impact of outsourcing, offshoring and global value chains
- Polarisation of labour market
- Role of social protection measures
- Labour market policy responses to globalisation
ES : Chapt 15,16
Novella Bottini, Christoph Ernst and Malte Luebker 2007, “Offshoring and the
Labour Market: What are the Issues?, Economic and labour market paper
Rasario Crino 2009, “Offshoring, Multinationals and Labour Market: A Review of the Empirical Literature”, Journal of Economic Surveys, Vol. 23, Issue 2,
Devashish Mitra and Priya Ranja 2011, “Social protection in labour markets exposed to external shocks” in Marc Bacchetta and Marion Jansen (eds) Making Globalisation Socially Sustainable, WTO-ILO.
Nina Pavcnik 2011, “Globalization and within-country income inequality” in Marc Bacchetta and Marion Jansen (eds) Making Globalisation Socially Sustainable, WTO-ILO.
VII. Pay Incentives & Productivity
- Productivity and the basis, level and sequencing of pay
- Executive compensation policy and issues
ES : Chapt 11
Lucian Bebchuk and Jesse Fried 2003, “Executive Compensation as an
Agency Problem”, Journal of Economic Perspectives, 17, pp. 71-92
Franz Ebert, Konstantinos Papadakis and Raymond Torres 2008, “Executive Compensation: Trends and Policy Issues”, International Institute for Labour Studies Discussion Paper 190, International Labour Office.
Brian Hall and Kevin Murphy 2003, “The Trouble with Stock Options”, Journal of Economic Perspectives, 17, pp. 49-70.
The assessment for this course will involve individual assignments, a term paper and a test. The grade for the module will be based on the following distribution of marks:
Instructions for Term Paper
||Assignment (Due: 27 Sep 15)
||Term Paper (Due: 7 Nov 15)
||Term Test (11 Nov 15)
||Term Paper Seminar (17-18 Nov 15)
1. Write a report on a labour market policy/issue from any topic covered in the course for a country/region/city. Some examples are: labour market policy responses to economic crisis, minimum wage and social protection issues, effect of labour market institutions, tertiary education and funding issues, skills upgrading and training issues, labour migration policies, earnings inequality and labour market implications, globalization and labour market impact, wage structure and productivity enhancement schemes etc.
2. The purpose of the paper is to explain, from the perspective of a critic and/or advocate, the current developments pertaining to the labour market issue. You should examine and assess the issue by applying the concepts/principles that you have learnt in the course. You should review recent policies that have been introduced/proposed, their intended objectives and actual outcomes, discuss their effectiveness and limitations, and recommend suggestions for improvement, if any.
3. You may assume that your intended audience is the relevant Minister/Governor/Mayor of the country/region/city. Your objective is to impress him/her with the relevant key information and a competent analysis to facilitate sound policy decisions.
4. Your submitted project report should begin with a one-page executive summary. The main body of your report should be between 12 to15 pages long (12pt font size and 1.5 lines spacing). Tables, bibliography, figures may be included as appendices and not count as part of the page limit. You will present your report to the class in a 15-minute presentation.
Submission of report
5. A printed copy of the report should be submitted to me.
7. A softcopy of the report should be uploaded through IVLE before the deadline and another submitted through the Turnitin plagiarism detection software available at http://www.cit.nus.edu.sg/plagiarism.
8. For ease of reference, the filename for your submitted report should be named as: PP5288 Termpaper_’your last name’. For example, for a person whose name is Verry Smart, the softcopy of the report should be named as: PP5288 Termpaper_Smart.
PP5288 Schedule of Lecture Topics & Due Dates
||12 Aug 15
||Introduction – shopping week
||19 Aug 15
||Overview and Labor Supply and the Decision to Work I
||26 Aug 15
||Labour Supply and the Decision to Work II
||2 Sep 15
||Employment of Labour I
||9 Sep 15
||Employment of Labour II
||16 Sep 15
||Human Capital Investment: Education and
||19 Sep – 27 Sep15
27 Sep 15
Due: Assignment 1
30 Sep 15
|Human Capital Investment: Education and
||7 Oct 15
||Labour Migration I
||14 Oct 15
||Labour Migration II
||21 Oct 15
||Earnings Inequality and Labour Market Impact of Globalisation I
||28 Oct 15
||Earnings Inequality and Labour Market Impact of Globalisation II
||4 Nov 15
7 Nov 15
|Pay Incentives and Productivity
Due: Term Paper
||11 Nov 15
||17 – 18 Nov 15
||Term Paper Seminar