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Course Description


Code: ECO452

Course Description and Course outline:

The political economy of labor economics studies the mechanism of labor markets operations. This course applies economic theory to the operation of labor markets and provides a comprehensive treatment of the key issues in labor economics. Some of the most important issues examined in Labor Economics include the theory of labor supply, the theory of labor demand, labor market equilibrium, the theory of compensating wage differentials, human capital theory, labor market discrimination, labor unions, labor mobility and unemployment. In particular, special reference is given to the history and development of the political economy of labor economics, the theory of labor supply, labor supply over the life cycle, household production, fertility, the theory of labor demand, the neoclassical model in competitive and non-competitive labor markets, quasi-fixed labor costs and their effects on labor demand,  general and specific training  and labor demand, human capital, the schooling model, the returns to schooling, educational signaling, the education - wage curve, compensating wage differentials, labor market discrimination,  the theories of labor market discrimination, antidiscrimination policies, labor unions, determinants of union membership, the supply and demand of unionization, aims and goals of unions,  efficient bargaining,  Hicks’s bargaining model and expected strike length, the effect of unionization on wages and employment,  the structure of compensation, fringe benefits, explicit and implicit contracts and asymmetric information, labor  mobility,  causes of unemployment, inflation and unemployment, and economic policies for unemployment.

Grading: One comprehensive final exam. Students are encouraged to submit and present a paper from a list of possible topics that is provided by the instructor. The paper can contribute up to 10% of the final grade.


  • George J. Borjas (2003), Labor Economics, Kritiki Publications (in Greek).