MIDLANDS STATE UNIVERSITY
FACULTY OF SOCIAL SCIENCES
Human Resource Department
Lecturer: Miss Nyanhete ()
MODULE OUTLINE: LABOUR ECONOMICS HRM104
This module concentrates on the application of economic theory and statistics to the problems of labour markets. It seeks to explain the supply and demand of labour and its implications on organisations. The module also looks at how labour market dynamics affect employment decisions in terms of numbers employed in relation to cost of labour and productivity.
1. Introduction to labour economics:
· Definitions
· Module focus,
· Overview of the labour market.
2. Demand for labour:
· wage changes,
· changes in product demand
· substitution and scale effect,
· Elasticity of demand.
3. Labour supply:
· market supply,
· supply to firms,
· determination of wages,
· decisions to work, preferences,
· labour supply and household,
· compensating wage differentials,
· Hedonic wage theory.
4. Human capital:
· education and training,
· mobility,
· concept of present value
· women and acquisition of human capital,
· Employee turnover.
5. Pay and productivity:
· how it affects and determines wages in firms,
· Methods of pay linked to performance.
6. Labour market discrimination:
· gender,
· race,
· Ethnicity
· occupation,
· Theories of labour market discrimination.
7. Trade unions and the labour market:
· the monopoly union model,
· union membership demand and supply,
· factors that affect demand and supply of union members,
· effects of unions on the labour demand curve,
· spill over effects and threat effects
· Unions and employment.
8. Unemployment and the labour market:
· sources of unemployment,
· frictional unemployment,
· structural unemployment,
· demand-deficient(cyclical) unemployment,
· Seasonal unemployment.
· Insider outsider theory
9. Frictions in the labour market
· Frictions to the employer
· Frictions to the employee
Assignment question: Highlight the impact of international trade and production sharing on the demand and supply of labour in a given labour market. (20)
Course work
· Assessment shall be continuous assessment and a written examination .
· Continuous assessment shall constitute 40% of final assessment:
Ø Group assignment
Ø Inclass test
Ø Presentation
· A written examination shall constitute 60% of final assessment
· To pass a candidate must score an overall of at least 50% of continuous assessment and examination combined.
Recommended texts:
1. Adnett .N. (1996) European Labour Markets: Analysis And Policy, Longman.
2. Ehrenberg .R. And Smith R. (2009), Modern Labour Economics,10th Edition, Pearson Education.
3. Funck.B. , Lodovico.P. (2001) Labour, Employment, And Social Policies In The EU Enlargement Process, The World Bank.
4. Marito.G., Jean .F. (2008) Youth In Africa’s Labor Market, The World Bank
5. Rubbery.J. And Wilkinson.F. (2002), Employer Strategy And The Labour Market, Oxford
6. Sloman.J., Sutcliffe.M. (2011) Economics For Business, 3rd Edition, Pearson Education.
Tutorials
1. Discuss the extent to which it is possible for a trade union to increase salaries in an organisation without resulting in loss of employment. (20)
2. “The value of migration as a means for enhancing economic efficiency is well known. However, it can become socially disruptive and inefficient where local companies perform so poorly that mass emigration occurs.” Discuss the validity of this statement. (20)
3. If the government provides child care subsidies to working single parents what would be the effect on the labour participation rate of those parents. (20)
4. Critically evaluate the labour market dynamics that inform the individual’s decision to supply or not to supply labour to a given occupation or firm.
5. Analyse the impact of international trade on a given labour market.(20)
6. Gary becker ( ) states that some types of discrimination are profitable and may persist in a very competitive environment. Identify and explain the types of discrimination that can result in greater employer profits, clearly highlighting how it does that. (20)
7. Employers usually support more immigration while workers resist it. Discuss in detail why an employer would support an increase in immigration and why employees would resist immigration. (20)
8. a) Using the human capital investment theory, explain the wage differentials between a skilled worker and an unskilled worker. (12)
b) Critically evaluate the relationship between education and earnings. (8)
9. Identify and discuss the various policies implemented by the Zimbabwean government to reduce inequality in the Zimbabwean labour market. (20).
10. Analyse the role played by technological advancements in decreasing or increasing the levels of employment in Zimbabwe. (20).
11. “Reducing pay and employing people in low wage jobs will depress national spending and make unemployment even worse”. Discuss the validity of this statement. (20)
12. Using the scale and substitution effect explain how the price elasticity of demand for a given product affects labour demand. (20)
13. Discuss how rigid occupational health and safety regulations on the reduction of risk of injury affect demand and supply of labour. (20)
14. Analyse the role played by technological advancements in decreasing or increasing the levels of employment in Zimbabwe. (20)
15. Discuss the impact of import restrictions on the demand for labour. (20)
16. Establish the relationship between welfare benefits, job search and unemployment.
17. Explain the concepts of over and underpayments. What circumstances would government allow firms to overpay employees? Use diagrams to explain.
18. Frictions in the labour market: Define concept, highlight the frictions that occur to the employer and those that occur to the employee.
19. Discuss the dual labour market theory. How does it explain labour market discrimination and job crowding?
20. With the aid of diagrams discuss the effects of payroll tax on employee wages and employment levels.