Author Profile

David Deming is a Professor of Economics at Harvard University, a research associate at the National Bureau of Economic Research, and a former junior fellow in the Harvard Society of Fellows. He specializes in research involving applied microeconomics, applied economics, and labor economics. His research primarily focuses on education and discrimination. His work focuses specifically on the exploration of a variety of subjects, such as structural estimation, affirmative action, minimum wages, teen sex, discrimination, higher education, and dynamic discrete choice models, among others. Deming has published papers on topics such as the racial achievement gap, the causes and consequences of distinctively black names, affirmative action, the impact of the crack cocaine epidemic, historically black colleges and universities, and acting white. In January 2008, at the age of 30, he became the youngest American to receive tenure from Harvard. He has been awarded a Sloan Research Fellowship, a Faculty Early Career Development Award from the National Science Foundation, and the inaugural Alphonse Fletcher Award (Guggenheims for race issues). In addition to his teaching and research responsibilities, Deming served as the Chief Equality Officer at the New York City Department of Education during the 2007–2008 school year. In this role, he developed and implemented several innovative ideas on student motivation and teacher pay-for-performance concepts. He won a Titanium Lion at the Cannes Lions International Advertising Festival (Breakthrough Idea of the Year in 2008) for the Million Motivation Campaign.

About The Book

Labor economics has always been an "applied" branch of study, and a thorough grounding in the eld requires at least an acquaintance with basic methodological techniques and problems. Labor Economics is a eld of study that examines the behavior of individuals, rms, and markets in relation to the employment and compensation of labor. This book delves into the analysis of workforce trends, wage determination, labor market policies, and the impact of government interventions on employment. Students will explore theoretical frameworks and empirical methods to understand the dynamics of labor markets, addressing issues such as unemployment, discrimination, and the role of human capital in shaping economic outcomes. Labor economics analyzes the behavior of employers and employees, focusing on wage determination, employment levels, and human capital, while public policy intervenes to address market inefciencies, inequality, and unemployment. Key policy areas include minimum wage laws, tax-transfer systems, education, immigration, and labor regulations, often aiming to balance economic efciency with social equity. This book explores using microeconomic theory and econometric analysis and emphasizes the link between research and public policy. Topics include labor supply and labor demand, taxes and transfers, minimum wages, immigration, human capital, education production, inequality, discrimination, and labor unions.

Table of Contents

Preface
1.
LABOR MARKET THEORIES IN
CONTEMPORARY ECONOMICS..............................................................1
1.1 Neoclassical and Keynesian views on labor market functioning
1.2 Contemporary labor market theories
1.3 Summary
2.
OVERVIEW OF THE LABOR MARKET ..................................................20
2.1 The Labor Market: Definitions, Facts, and Trends
2.2 How the Labor Market Works
2.3 Applications of the Theory
3.
THE DEMAND FOR LABOR....................................................................46
3.1 Profit Maximization
3.2 The Short-Run Demand for Labor When Both Product and
Labor Markets Are Competitive
3.3 The Demand for Labor in Competitive Markets When
Other Inputs Can Be Varied
3.4 Labor Demand When the Product Market Is Not Competitive
3.5 Policy Application: The Labor Market Effects of
Employer Payroll Taxes and Wage Subsidies
4.
LABOR DEMAND ELASTICITIES...........................................................66
4.1 The Own-Wage Elasticity of Demand
4.2 The Cross-Wage Elasticity of Demand
4.3 Policy Application: Effects of Minimum Wage Laws
4.4 Applying Concepts of Labor Demand Elasticity to the Issue of
Technological Change
5.
FRICTIONS IN THE LABOR MARKET....................................................93
5.1 Frictions on the Employee Side of the Market
5.2 Frictions on the Employer Side of the Market
5.3 Training Investments
5.4 Hiring Investments
6.
SUPPLY OF LABOR TO THE ECONOMY:
THE DECISION TO WORK ....................................................................122
6.1 Trends in Labor Force
Participation and Hours of Work
6.2 A Theory of the Decision to Work
6.3 Empirical Findings on the Income and Substitution Effects
6.4 Policy Applications
7.
LABOR SUPPLY: HOUSEHOLD PRODUCTION,
THE FAMILY, AND THE LIFE CYCLE...................................................154
7.1 A Labor Supply Model that Incorporates Household Production
7.2 Joint Labor Supply Decisions within the Household
7.3 Life-Cycle Aspects of Labor Supply
7.4 Policy Application: Child Care and Labor Supply
8.
COMPENSATING WAGE DIFFERENTIALS AND
LABOR MARKETS ...................................................................................178
8.1 Job Matching: The Role of
Worker Preferences and Information
8.2 Hedonic Wage Theory and the Risk of Injury
8.3 Hedonic Wage Theory and Employee Benefits
9.
INVESTMENTS IN HUMAN CAPITAL:
EDUCATION AND TRAINING...............................................................203
9.1 Human-Capital Investments: The Basic Model
9.2 The Demand for a College Education
9.3 Education, Earnings, and
Post Schooling Investments in Human Capital
9.4 Is Education a Good Investment?
10.
WORKER MOBILITY:
MIGRATION, IMMIGRATION, AND TURNOVER................................232
10.1 The Determinants of Worker Mobility
10.2 Geographic Mobility
10.3 The Role of Distance
10.4 The Earnings Distribution in
Sending Countries and International Migration
10.5 The Returns to International and Domestic Migration
10.6 Policy Application: Restricting Immigration
10.7 Naive Views of Immigration
10.8 An Analysis of the Gainers and Losers
10.9 Employee Turnover
11.
PAY AND PRODUCTIVITY:
WAGE DETERMINATION WITHIN THE FIRM...................................257
11.1 Motivating Workers: An Overview of the Fundamentals
11.2 Productivity and the Basis of Yearly Pay
11.3 Productivity and the Level of Pay
11.4 Productivity and the Sequencing of Pay
11.5 Applications of the Theory: Explaining Two Puzzles
Bibliography...............................................................................................283
Index...........................................................................................................297