The aim of the course is to provide the microeconomic foundations to
comprehend the behaviour of workers and firms in supplying and
demanding labour services, the way the labour market works, and the
causes of market failure, wages rigidity and the persistence of unemployment.
The learning objectives, the competencies and the outcomes of the
course are as follows
Knowledge and understanding: the student must be able to understand
what are the determinants of the micro-level labour supply and demand,
what are the characteristics of the labor market and what are the factors
that prevent the market from being efficient.
Applying knowledge and understanding: at the end of the course, the
student will be able to know the main sources, to read the main statistical
data on labour market and newspaper and / or magazine articles that
analyze the market trends.
Making judgments: once the main models that explain the labor market
have been learned, the student must be able to assess the economic
causes of unemployment and judge which labor policies are able to
better cope with the phenomenon.
Communication skills: the student must be able to respond in a clear,
cogent and exhaustive manner to both the final and intermediate written
exam questions and to comment in an oral or written form on the
Learning skills: the student must demonstrate good learning skills by
being able to deepen their knowledge on bibliographic references
relevant to the field under study. Furthermore, the student must
demonstrate that he is able to apply the knowledge gained in the
evaluation of employment policies.
Basic knowledge of the microeconomic theory
The Labour Supply
The worker-consumer's preferences, budget constraints, short term
labour supply curve, female labour supply, household labour supply, long
term labour supply curve.
The Labour Demand
The function of production. Short and long term labour demand. The
Hicks- Marshall rules of derived demand. The costs of adjustment and the
The Market Equilibrium
The case of perfect competition and distributive efficiency. Non competitive markets: monopoly and
monospony. Non competitive equilibrium among labour markets.
The Human Capital
The model of the education. Theory of the signals. The investment in
Discrimination in the Labour Market
Discrimination by the employers, discrimination by workers, consumers
discrimination, statistical discrimination.
Migrations, tournover and matching and over education.
Unemployment Definitions, job search, efficiency wages, implicit contracts, structural unemployment: the Beverige curve ((1,5 cfu)
G.J. Borjias, Economia del Lavoro, Brioschi Editore, 2010
Capp. 1,2,3,4,6, 8, 9,12
F. E. Caroleo “Fondamenti teorici della rigidità salariale nell'ambito dei non market clearing models”,(2004) Studi Economici, n.83, 2004/2. (articolo disponibile sul Team del corso)
F. E. Caroleo “La strategia europea per l’occupazione e il ruolo delle istituzioni” Celpe discussion paper (articolo disponibile sul Team del corso)
Module 1 (2 cfu)
Microeconomics of labour market
The individual labour supply
The firm's Labour demand
Case of perfect competition. Non-competitive markets: monopoly e monosponium.
Module 2 (1 cfu)
Discrimination in the labor market
Module 3 (1 cfu)
Microeconomic market failure
Models with price rigidity:
Dual labor markets, job search, efficiency wages, implicit contracts, indider outsiders
Module 4 (2 cfu)
Macroeconomic market failures
Models NEK, NMC, Beveridge curve
Structural unemployment and the role of institutions
The course is organized with traditional frontal lessons, seminars with
external experts, reading articles.
After the first part of the course will done an intermediate written test with open questions aiming to verify the learning degree of students and, if necessary, make corrections and insights into the program carried out.
George J. Borjas, Labor economics, Mc Grow Hill, 2019
F. E. Caroleo “Theoretical foundations of wage rigidity in the context of non-market clearing models”, (2004) Studi Economici, n.83, 2004/2. (in Italian) (article available on Teams)
F. E. Caroleo "The European strategy for employment and the role of institutions" Celpe discussion paper (in Italian) (article available on Teams)
The objective of the exam is to verify the level of achievement of the previously indicated training objectives. The exam is divided into 2 parts which take place on the same day.
• a written test consisting of two or three open questions relating to all the topics covered in the course; the test has the aim of evaluating the study of the argument and the understanding of the basic topics and is of a selective nature (the student who does not show sufficient knowledge of the topics does not pass the exam); for each question a score between 0 and 5 will be given. To pass the test it is necessary to acquire at least 5 points out of 10 (if there are 2 questions) or 7 out of 15 (if there are three questions). The estimated time for the test is 1 hour. It is not allowed to consult texts or use PCs, smartphones, calculators.
• an oral test in which the results of the written test will be discussed and the final mark expressed out of thirty will be agreed; For the students who attended classes, in the final evaluation, the results of the intermediate tests and the reports on the seminars held or on the agreed readings will also contribute. The evaluation of the evidence takes into account the efficiency of the methods used, the completeness and accuracy of the answers, as well as the clarity of presentation.