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Technological Change, Inequality and Labor Market (ECO-AD-TECHCHANG)

ECO-AD-TECHCHANG

Description

Instructor: Siyu Shi 
Email: siyu.shi@eui.eu 

Course abstract:

This half-credit course explores recent literature at the intersection of  labor economics and macroeconomics. The goal of this course is to equip you with both  empirical and analytical tools to address research questions related to these fields. We will cover the following topics in sequence: 

• Taxation and inequality 
We first examine some stylized facts about income inequality in the United States. Then we investigate the source of inequality through a standard Ben-Porath human capital model. We also compare income tax schedule across countries and study why U.S. has a much  higher level of income inequality relative to European countries. 
References: 
Huggett, Mark, Gustavo Ventura, and Amir Yaron. "Sources of lifetime inequality." American Economic  Review 101.7 (2011): 2923-2954. 
Guvenen, Fatih, Burhanettin Kuruscu, and Serdar Ozkan. "Taxation of human capital and wage inequality: A  cross-country analysis." Review of Economic Studies 81.2 (2014): 818-850. 
Hoffmann, Florian, David S. Lee, and Thomas Lemieux. "Growing income inequality in the United States and other advanced economies." Journal of Economic Perspectives 34.4 (2020): 52-78. 

• Skill-biased technological change 
The skill premiums, defined as the relative earnings between college and non-college  workers, have been increasing steadily over the past several decades. We will study the  canonical model of skill-biased technological change to understand this trend. We will also 
discuss the limitations of the canonical model and other extensions. 
References: 
Acemoglu, Daron, and David Autor. "What does human capital do? A review of Goldin and Katz's The race  between education and technology." Journal of Economic Literature 50.2 (2012): 426-463. 
Bowlus, Audra, et al. "Wages, skills, and skill-biased technical change: The canonical model revisited." Journal of Human Resources 58.6 (2023): 1783-1819. 
Ohanian, Lee E., Musa Orak, and Shihan Shen. "Revisiting capital-skill complementarity, inequality, and labor share." Review of Economic Dynamics 51 (2023): 479-505. 
Bils, Mark, Baris Kaymak, and Kai-Jie Wu. "Labor substitutability among schooling groups." American  Economic Journal: Macroeconomics 16.4 (2024): 1-34. 

• Labor market polarization 
The U.S. labor market has witnessed “hollowing-out” in the past several decades: the employment share of mid-skill occupations keeps decreasing while the employment shares of low-skill and high-skill occupations are growing. We will study some standard 
models to explain these empirical patterns. 
References: 
Autor, David H., Frank Levy, and Richard J. Murnane. "The skill content of recent technological change: An empirical exploration." The Quarterly journal of economics 118.4 (2003): 1279-1333. 
Goos, Maarten, Alan Manning, and Anna Salomons. "Job polarization in Europe." American economic review 99.2 (2009): 58-63. 
Autor, David H., and David Dorn. "The growth of low-skill service jobs and the polarization of the US labor market." American economic review 103.5 (2013): 1553-1597. 
Cerina, Fabio, Alessio Moro, and Michelle Rendall. "The role of gender in employment  polarization." International Economic Review 62.4 (2021): 1655-1691. 

Assignment: In principle, there will be one computational homework and one presentation. Students can form a group of two or three and work together on the homework and presentation. 

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