Indian Institute of Management, Calcutta

Post Graduate Programme 2006-2007

Course Name/Code EC225/HR225
Term PGP II, Term V
Name of Course Coordinator Prof. Debashish Bhattacherjee
Name of the Instructor(s) Prof. Debashish Bhattacherjee
Course Prerequisites (if any) Although there are no formal pre-requisites for his
course, the instructor assumes that the enrolled
student is familiar with basic microeconomics and
macroeconomics as well as statistical methods (all of
which have been done in the first year).
Restrictions on course registration 30
Minimum number of students required to offer the course 10

Objective: The objective of this course is to familiarize MBA students with the basic analytical tools used by labor
economists to study labor market processes and labor market outcomes. The essential purpose here is to expose
business school students to both the neoclassical and the institutional approaches to the study of human resources
and labor markets. The course is specifically designed and targeted for b-school students interested in effecting
managerial change in their organizations in the context of globalization and rapid economic change. Consequently,
the course stresses more on concepts, policy, and empirical procedures rather than on the intricacies of economic
formalism.

Session Plan:

Session 1: Introduction to Course & A Primer on Quantitative Techniques / Reading: Borjas, Chapter 1

Session 2: Labor Supply 1 / Reading: Borjas, Chapter 2

Session 3: Labor Supply 2 / Reading: Borjas, Chapter 3

Session 4: Labor Demand / Reading: Borjas, Chapter 4

Session 5: Labor Market Equilibrium / Reading: Borjas, Chapter 5

Session 6: Group Presentation 1 / Reading: Ahsan & Pages (2006)

Session 7: Human Capital 1 & 2 / Readings: Borjas, Chapters 7 & 8

Session 8: Group Presentation 2 / Reading: Narain (2006)

Session 9: Economics of Discrimination / Reading: Borjas, Chapter 10

Session 10: Group Presentation 3 / Reading: Das (2006)

Session 11: Economics of Trade Unions / Reading: Borjas, Chapter 11

Session 12: Labor Market Contracts & Work Incentives / Reading: Borjas, Chapter 12

Session 13: Group Presentation 4 / Reading: Bhattacherjee (2005)

Session 14: Unemployment / Reading: Borjas, Chapter 13

Session 15: Group Presentation 5 / Reading: Hasan & Pages (2006)

Session 16: Motivation: Contracts, Information & Incentives / Reading: Milgrom & Roberts, Part III

Session 17: Group Presentation 6 / Reading: Milgrom & Roberts, Part V, Chapter 10

Session 18: Group Presentation 7 / Reading: Milgrom & Roberts, Part V, Chapter 12

Session 19: Group Presentation 8 / Reading: Milgrom & Roberts, Part V, Chapter 13
Session 20: Summing Up & Course/Instructor Feedback

Texts:
(1) George Borjas, Labor Economics, 1996, McGraw-Hill International Edition
(2) Paul Milgrom & John Roberts, Economics, Organization and Management, 1992. Prentice-Hall.

Articles:
(1) Ahmad Hasan & Carmen Pages, “Some Implications of Regional Differences in Labor Market
Outcomes in India.” (World Bank, 2006)
(2) Ashish Narain, “Labor Force Participation Rates, Wages and their Determinants in India”. (World Bank,
2006)
(3) Maitreyi Bordia Das, “Do Traditional Axes of Exclusion Affect Labor Market Outcomes in India?”.
(World Bank, 2006)
(4) Debashish Bhattacherjee. “The Effects of Group Incentives in an Indian Firm: Evidence from Payroll
Data”. (LABOUR, 2005)
(5) Ahmad Hasan & Carmen Pages, “Helping or Hurting Workers? Assessing the Effects of De Jure and De
Facto Labor Regulation in India”. (World Bank, 2006)
(6) Kaushik Basu, “Teacher Truancy in India: The Role of Culture, Norms & Economic Incentives’
(Cornell University, 2006)

Pedagogy

The course would be conducted through lectures, group presentations and discussions. Students are expected to read
the assigned chapters prior to the lecture so that sufficient time is spent in class discussions. A comprehensive end-
term (closed book) three-hour exam will be held comprising of material covered in class. The weight for this end-
term will be 40% of the final grade. Another 40% of the final will be based on a research paper that will be due at
the end of the term. Ideally, this research paper should be empirically based, i.e., one that uses existing data bases
and standard computer statistical packages. Students are required to clear their research topics with the instructor
prior to starting on their projects. Finally, 20% of the final grade will be based on the group presentations.

Evaluation Method

Group Presentation = 10%

Research Paper = 40%
End term examination = 50%