Learning outcomes

1. Identify the pertinent question, synthetize the essential elements to understand the question; Identify why and in which context a particular model is useful, particularly by identifing the role of the model's assumptions; Be able to have a clear and rigourous reasoning

2. Be aware of the interactions between economics and other social sciences, also by having a critical view; Be able to use the tools of economics in a innovative way

3. Aquire specific knowledge in the domain of human ressource economics

4. Express both orally and in writing a message in a clear and structured way

Content

To understand the behaviour of the firm towards its workers and the behaviour of the workers towards the firm is of crucial importance if one wants to understand the firm’s human resources policy, but also if one wants to explain economic phenomena like wage inequality and discrimination.

 

While it is usually assumed that the firm is maximizing its profits, it has to take into account that labour is a fundamentally different input than capital or any intermediate good. Workers are human beings and behave as such. The firm chooses its actions to give incentives to workers. This starts with the recruiting process (what criteria should the firm use when it selects its employees?), the compensation (wage contracts: fixed wage, promotions, or piece rates based on output?), and the organization of work (when should the firm use teams? Should it use flat hierarchies?).

 

The behaviour of the firm has obviously an important impact on labour market outcomes. Hence, throughout the course, we will discuss several topics in all its aspects (recruiting, compensation and organization of work):

  • Discrimination: How can the behaviour of the firm and the workers explain the male/female wage differentials?
  • Wage inequality: How can the behaviour of the firm and the workers explain wage inequalities, and what are the forces that drive this inequality?

 

When going through the sessions, we will use theories related to adverse selection and moral hazard, but also elements from behavioural economics. Teaching includes analytical theories, but also empirical evidence, and case studies. Case studies are evaluated for the final grade.

 

Assessment method

The final grade depends on the case studies (30%) and an oral exam (70%).

Language of instruction

Français