Labor Market Outcomes
Instructor: Robert Shimer (University of Chicago)
The objective of this course is to explore the determination of labor market outcomes, including employment, hours worked, unemployment, worker flows, and wages. We will focus on the behavior of these outcomes at business cycle frequencies, paying particular attention to whether one can usefully think about the labor market as being in equilibrium, with workers choosing how much labor to supply, and firms choosing how much labor to demand, at the market wage.
To answer this question, it is important to know how elastic is labor supply, and so the course will spend some time studying recent empirical evidence on this question. The evidence suggests that one can usefully think about the labor market as clearing in the long-run, but not at business cycle frequencies. Search theoretic models of the labor market offer one possible explanation for why the labor market does not clear at each instant. But whether this explanation is consistent with facts about the business cycle depends on how wages are set.
Course Outline
- Labor market facts
- Elasticity of labor supply
- Search theoretic models of unemployment
- The impact of wage rigidities
Robert Shimer is the Alvin H. Baum Professor in Economics at the University of Chicago. Prior to joining the Chicago faculty in 2003, he received his PhD at the Massachusetts Institute of Technology and taught at Princeton University. He is a consultant at the Federal Reserve Banks of Atlanta and Chicago, a Research Associate in the National Bureau of Economic Research, a Fellow of the Econometric Society, and a member of the American Academy of Arts and Sciences. He is a co-chair of the NBER Economic Fluctuations and Growth “Macro Perspectives” group, and has served as editor of the Journal of Political Economy since 2004.
Prof. Shimer’s research lies in the intersection between macroeconomics and labor economics. He has focused on search frictions and on the mismatch between workers’ human capital and geographic location and the skill requirements and location of available jobs. He is the author of the book Labor Markets and Business Cycles and has published in many leading journals, including the American Economic Review, Econometrica, the Journal of Political Economy, the Quarterly Journal of Economics, the Review of Economic Studies, the Journal of Economic Literature, and the American Economic Journal: Macroeconomics.
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