Economic Policy Analysis – Labor Market Consequences of Public Policy Decisions

Fall Quarter 2001



Professor Linda Bell

Econ 337

Phone: 723-3251

Office Hours: Tuesday 9:30-11:00 and Thursday 1:15-2:15


Tuesday/Thursday 11:00-12:50 Room 60-61G


Public policy has two complementary constructs -- one driven by ethical, moral, and political dogma, the other by technique, and analysis. As policy makers we must have an appreciation for the necessity of technical expertise and sophisticated analysis while pursuing goals often led by ideology. Likewise, as economists we must consider the social and political consequences of the policies our science may advocate.

This course will focus on the economics of labor markets and the public policy decisions that impact these analyses. We will begin by reviewing and developing the theoretical tools of analyses based on labor supply, labor demand, and elasticity, and continue to explore the institutional evolution of U.S. labor markets today. Specific topics covered will be: (1) minimum wage legislation and its impact on work-choice, inequality, poverty, and employment with a focus on whether or not to discard the minimum wage or increase its potency; (2) welfare reform and its impact on the labor market, inequality, poverty, and unemployment, with a focus on the decisions facing the Bush Administration as the original legislation expires, and; (3) the evolving and changing 21st century U.S. labor market and its consequences for efficiency, work hours, women’s work, and the quality or our lives.


Required (and certain optional) readings are available in a binder available for purchase through the bookstore. Please note that not all readings in the binder are required; included optional readings are deemed to be helpful to group presentations and lectures.


  1. Students are required to attend all classes and to come to class prepared to discuss the assigned readings. Students are expected to inform the professor in advance of an anticipated class absence.
  1. Each student will be required to complete an individual research paper on a topic related to labor markets and public policy and of the student’s choosing. Students must submit a research prospectus and partial bibliography on their research project. The timeline for these submissions is listed below. This 10-to-15-page research policy paper will be due at the end of the quarter. Students will present their research during specially assigned classes at the end of the quarter.
  1. Students will also participate in a group project during the quarter. In each project, groups of 2 or more students will prepare a class presentation and written policy brief on an assigned labor market topic. Policy briefs will be limited to 6 pages.

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  1. Students will be assigned as discussion leaders for in class papers. Students should read these papers carefully and come to class prepared to lead discussion. Handouts and over-head slides are encouraged as a tool for facilitating discussion.

It is expected that students will use properly documented on-line materials in preparing their group policy brief and individual research paper. Several key sites for accessing information follow the course overview. Students are encouraged to check these sites on a regular basis as a way of preparing for classes as well as group and individual projects. On indicated dates, internet material may be required for class discussion.


Grades for the class will be based on the individual research project and presentation (worth 40% of the final grade), the group research brief and presentation (worth 25% of the final grade), their role as discussion leader (worth 10% of the grade) and their active classroom participation throughout the semester (worth 25% of the grade).


There will be a teaching assistant assigned to this course to help you with questions you may have regarding the course material and in choosing research topics and research methods. The graduate student teaching assistant will schedule regular weekly office hours for this purpose.


  1. Written Research Prospectus for Individual Project:

Thursday, October 18

  1. Group Project Reports:

Due 1 Week After In-Class Presentation

  1. Individual Research Presentations:

Final Week of Classes in December

  1. Research Paper Due Date:

December 7, by 12:00 Noon

Please note that these dates are firm. You should expect to meet all course deadlines. Detailed instruction will be given on paper and presentation requirements.

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Fall 2001

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Bureau of Labor Statistics:

The BLS keeps a variety of recent and historical statistics relating to the labor market.

Economic Report of the President, 2000:

This summarizes key aspects of the U.S. economy and offers good data.

United States Census Bureau:

This offers lots of government statistics and briefing papers.

White House Economic Statistics Briefing Room:

There is easy access here to current Federal economic indicators.

Bureau of Labor Statistics Most Requested Series:

Data on national and regional employment and unemployment, prices and living conditions, consumer price indices, and compensation and working conditions.

Bureau of Labor Statistics News Releases:

Contains briefings and papers on many well-documented topics.

Department of Labor:

The key governmental agency page with links to other related sites.

Administration for Children and Families:


The Electronic Policy Network:

This is a valuable source for a first search of the Internet. It is a consortium of public policy publications and organizations.

Brookings Institute:

Economic Policy Institute:

Urban Institute:

Rand: (information on demographic patterns):

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Note: (CL) Denotes Class Leader Assigned.


Class 1 – Lecture (October 2): What Economists Tell Us About Minimum Wages: Facts and Figures.

Required Reading:

(1)David Card and Alan Krueger, Myth and Measurement: The New Economics of the Minimum Wage, Princeton, NJ: Princeton University Press, 1995. Chapter 1, “Introduction and Overview,” pp. 1-13.

Class 2 - Lecture (October 4): What Economists Tell Us About Minimum Wages: The Theory

Required Reading:

(1)Brown, Charles, Curtis Gilroy, and Andrew Kohen, 1982. “The Effect of the Minimum Wage on Employment and Unemployment.” Journal of Economic Literature, 20, pp. 487-528.

(2)Card, David, and Alan B. Krueger, 1995. Myth and Measurement: The New Economics of the Minimum Wage, Princeton, NJ: Princeton University Press, 1995. Chapter 11, pp. 355-386.

Class 3 – Policy Discussion (October 9): What Our Soul Tells Us: The Politics of Increasing the Minimum Wage

Required Reading:

“In this corner …”

(1)Schmitt, 2000. “The Impact of the Minimum Wage: Policy Lifts Wages, Maintains Floor for Low-Wage Labor Market,” Economic Policy Institute Briefing Paper.

(2)Rasell, Edith, and Jared Bernstein, and Heather Boushey, 2001. “Step Up, Not Out: The Case for Raising the Federal Minimum Wage for Workers in Every State,” EPI Issue Brief #149, February.

“In the other corner …”

(3)Heritage Foundation Briefing, “The Folly of Increasing the Minimum Wage.”

(4)MaCurdy, Thomas, “Why Are Minimum Wages So Popular?”, 1999, Hoover Institution Briefing, November.

(5)Neumark, David, 1998. Edited Summary, “Do Minimum Wages Help Low-Income Families?”

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Optional Additional Reading:

(1) California Budget Project, Budget Brief, 2000. “California’s Recent Minimum Wage Increases”

(2) Jared Bernstein and Chauna Brocht, EPI Issue Brief #130B, “The Next Step: The New Minimum Wage Proposals and the Old Opposition.”

**Class 4 – Group Project – Group A (October 11 – To Be Rescheduled): Minimum Wage Legislation Question – Amending the Current Law.


Class 5 - Lecture (October 16): Welfare and Poverty

Required Reading:

(1)Mary Jo Bane and David Ellwood, Welfare Realities: From Rhetoric to Reform, Cambridge: Harvard University Press, 1994. Chapter 1, “The Context for Welfare Reform.”

(2)Welfare Realities: From Rhetoric to Reform, Chapter 3, “Understanding Dependency.”

Optional Reading:

(3)National Center for Children in Poverty, “Child Poverty in the States: Levels and Trends from 1979 to 1998.”

Class 6 – Lecture and Policy Discussion (October 18): The TANF Legislation Design

Required Reading:

(1)Children’s Defense Fund, “Welfare Reform: CDF Summarizes Conference Bill.”

(2)Administration for Children and Families, “TANF Fact Sheet.”

(3)Internet Source Updates

Class 7 – Policy Discussion (October 23): The Effectiveness of Welfare Reform – Early Evidence

Required Reading:

(1)Mary Jo Bane, “Welfare as We Might Know It,” in The American Prospect, no. 30, (January-February, 1997), pp. 47-53.

(2)Burtless, Gary, “Can the Labor Market Absorb Three Million Welfare Recipients?” (March 2000), mimeo.

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Class 8 – Policy Discussion (October 25): The Effectiveness of Welfare Reform – More Recent Evidence

Required Reading:

(1)Center on Urban and Metropolitan Policy, The Brookings Institution, “The State of Welfare Caseloads in America’s Cities: 1999.”

(2)Haskins, Ron, Testimony Before the Committee on the Budget, US House of Representatives, August 1, 2001.

Optional Reading Sources:

(3)Haskins, Ron and Wendell Primus, 2001. “Welfare Reform and Poverty,” New Federalism, Urban Institute Policy Brief No. 4, July.

(4)Internet sources with links listed especially at and

Class 9 – Group Project – Group B (October 30): A Report on the State of Welfare Caseloads in The U.S. Today – “The Good, The Bad, and The Ugly”

Required Reading:

(1)Blank, Rebecca, and Robert F. Schoeni, 2000. “What Has Welfare Reform Accomplished?” Mimeo.

All Welfare Readings, Internet Source Work.

Class 10 - Group Project – Group C (November 1): Welfare Reform Tomorrow: Changes and Reforms and The Bush Administration

Required Reading:

(1)Ellwood, David, 2001. “Anti-Poverty Policy for Families in the Next Century: From Welfare to Work – and Worries,” Journal of Economic Perspectives 14 (Winter), pp. 187-98.

(2)Loprest, Pamela, 2001. “How Are Families That Left Welfare Doing? A Comparison of Early and Recent Welfare Leavers,” New Federalism, Urban Institute Series B, No. B-36, April.

(3)Zedlewski, Sheila and Donald Alderson, 2001. “Before and After Reform: How Have Families on Welfare Changed?” New Federalism, Urban Institute Series B, No. B-32, April.

(4)Acs, Gregory and Sandi Nelson, 2001. “Honey, I’m Home – Changes in Living Arrangements in the Late 1990s.” New Federalism, Urban Institute Series B, No. B-38, June.

Optional Reading Sources:

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(1)Internet sources listed especially at and


Class 11 – Lecture (November 6): Working Too Hard – Why?

Required Reading:

(1)Linda Bell and Richard Freeman, 2000. “Working Hard and Working Easy: Hours Worked and Earnings Dispersion in the U.S. and Germany”, Labour Economics.

(2)Bluestone, Barry and Stephen Rose, 2000. “The Enigma of Working Time Trends,” in Golden, Lonnie and Deborah Figart, eds., “Working Time: International Trends, Theory and Policy Perspectives,” pp. 21-37.

(3)Schor, Juliet, 1998. The Overspent American, Chapter 1, “Introduction”, New York: Basic Books, pp. 3-24.

(4)Frank, Robert H. 1999. Luxury Fever: Why Money Fails to Satisfy in an Era of Excess. Chapter 1, “Money Well Spent,” pp. 1-13.

(5)Reich, Robert, 2000. The Future of Success. Chapters to be assigned and handed out in class.

Class 12 – Policy Discussion (November 8): Working Too Hard – Why?

Required for Discussion:

You are required to piece together labor market facts. Gather data from Labor Department and other web sites.

Class 13 – Policy Discussion (November 13): A Labor Market in Transition – Group Differences

Required Readings:

(1)Blau, F. and L. Kahn, 2000. “Gender Differences in Pay,” NBER Working Paper No. 7732, June.

(2)Darity, W. and P. Mason, 1998. “Evidence on Discrimination in Employment,” Journal of Economic Perspectives (Fall), pp.47-63.

Optional Reading:

(3)Loury, Glenn, 1998. “Discrimination in the Post-Civil Rights Era: Beyond Market Interactions,” Journal of Economic Perspectives 12 (Spring), pp.117-26.

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Class 14 – Policy Discussion (November 15): A Labor Market in Transition – The Role of Technology

Required Reading:


Class 15 – Group Project – Group D (November 20): Our Lives, Our Work, and Our Families – US Labor Market Working Time Comparisons


November 27 – Wave 1 – Paper in Progress Presentations

November 29 – Wave 2 – Paper in Progress Presentations

December 4 – Wave 3 – Paper in Progress Presentations

December 6 – Wave 4 – Paper in Progress Presentations