Econ 861
Empirical Micro-Economics

Winter 2017

C. Ferrall


This course covers theory, data and econometric methods related to microeconomics. The main topics come from labour and education with some connections to health and public finance. Assignments will involve extensive use of Stata. At least one assignments involves computations to be done using language/package of the student's choice. Lectures will cover both theory and econometric methods not covered or emphasized in Econ 852.


Part I. Hours, Wages, Sector, Schooling

  1. Basic Models
    1. Human Capital (Becker)
    2. On the Job Training (Mincer)
    3. Sectoral Choice (Roy)
    4. Labour Supply and Selection (Heckman)
    5. Lifecycle Labour Supply (Macurdy)
  2. Modern Syntheses & Applications
    1. Labour Supply with Learning By Doing (Imai and Keane)
    2. Dynamic Roy Models (Keane and Wolpin, Lee and Wolpin)
    3. Earnings Subsidies (Ferrall)
  3. Extensions / Alternatives
    1. Signalling (Spence, Bedard)
    2. School and Teacher Quality (Todd and Wolpin, Rivkin et al.)
    3. Parental Investment (Bernal, Del Boca et al, Kottelenberg and Lehrer)
    Related Econometric Techniques
    1. Limited Dependent Variables
    2. Panel Data Techniques
    3. Instrumental Variables
    4. Selection Correction
    5. 'Causal' Effects Estimation

Part II. Unemployment, Joint Production, Inequality

  1. Models
    1. Search (McCall)
    2. Bargaining (Nash)
    3. Matching and Learning (Jovanovic, Burdett & Mortensen)
    4. Agency ()
    5. Task Assignment (Rosen)
  2. Applications
    1. Unemployment Insurance (Ferrall)
    2. Minimum Wages (Flinn)
    3. Labour Market Equilibrium (Postel-Vinay et al)
    4. Piece Rates and Incentives (Shearer)
    5. Inequality and 'Tasks' (Autor et al.)
    Related Econometric Techniques
    1. Duration Models
    2. GMM

Assignments & Exams

Each item listed will be given a letter grade. The weights given are approximate.
Planned Assignments [60%]
Assignments will be averaged with some extra weight given to your best assignment grade.
  1. Extract data used in covered papers, replicate descriptive results about the estimation sample.
  2. Selection correction and limited dependent variable estimation
  3. Search theory and computation; estimate a hazard model
Research Proposal [10%]
Propose research using methods or covering topics related to this course. This can be your actual MA essay topic if it overlaps. If your MA essay is not related to this course you need to study some topic related to this course.
Takehome Final Exam [30%]
A combination of pen-and-paper modeling, empirical work and short essay questions to be done individually.

Attendance & Engagement

Attendance at lecture is not mandatory. Students who are engaged at most lectures will get the benefit of the doubt when grading assignments and exams. The effect of these considerations will be at most two ticks. For example causing a grade to movie up from B to A- or move down from B+ to B-.
Recruitment Seminars: The Department will be bringing several job market candidates doing work in this area to campus. Attendance is mandatory at seminars I designate, with an allowance for missing one-in-three.