Labor Economics by Cahuc/Zylberberg is an excellent textbook.

So after being in limbo for many, many months, all my stuff has finally been shipped to the East Coast.

And this allows me to go through books that have been in storage for over half a year. One of which is Labor Economics by Pierre Cahuc and André Zylberberg, one of the few graduate-level labor economics textbook out there.

Thorstein Veblen the blogger took an email from a reader interested in learning about economics. I imagine that a lot of people read the economic and finance blogosphere to try and self-teach economics. (I know I did.) If you are interested in labor economics (and microeconomics too) at a graduate level of sophistication, I would recommend this textbook. I learned about several things I was interested in – Shapiro and Stiglitz’ shirking models, Rubinstein bargaining models, search models, phillips curves and the critiques thereof – in a way that was really accessible, far more accessible and better placed in intellectual context than the other leading textbooks.

And checking it out again, there’s all kinds of stuff in there about both the Beveridge curve and hysteresis, things very much in the debate right now, things that I’m thinking about right now.

It works well with just an undergraduate level of economics. It gives you a solid background if you then want to go and sneak follow David Card’s lecture notes online or read the latest syllabi for graduate labor seminars to see what people are discussing.

What have you been reading or re-reading at the end of summer?

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4 Responses to Labor Economics by Cahuc/Zylberberg is an excellent textbook.

  1. I just ordered a copy.

    My favorite government policy economics book is Gruber’s. It recently came in handy in a discussion with Scott Sumner. The issue was supply side “economics”. After pointing out the income and substitution effects and the overwhelming historical record showing people on average don’t work more hours in response to a raise in their after tax wage, I added:

    And finally, here is the conclusion of an expert in this area, well versed in this literature, MIT economist Jonathan Gruber, “Changes in tax rates appear to have relatively modest effects on total gross income; the total amount of income actually generated through work or savings does not respond in a sizable way to taxation”, (“Public Finance and Public Policy”, 2nd edition, 2007, page 734)

    at: http://www.themoneyillusion.com/?p=6008

    And I finally got Scott Sumner to admit it. These are the last two comments in the thread:

    Scott,

    In your comment above, 9. July 2010 at 16:11, when you wrote:

    Gruber’s statement is so vague I can’t comment on it. I agree most tax changes do have a big impact on hours worked. The supply-side effects show up in all sorts of areas—the efficiency of production being perhaps more important than hours worked. And then there is saving and investment.

    Did you mean, “do not have a big impact”?

    # Gravatar of ssumner ssumner
    26. July 2010 at 10:47

    Richard, Yes, I meant do not. Sorry about that typo.

    End Quotes

    So, I actually got Scott Sumner to admit most tax changes do not have a big impact on hours worked. Amazing!

    I did not have time to pursue his assertion that tax changes (other than something really extremely high) can affect savings and investment significantly, but that allows me to segue into the next book: Bernanke’s 2008 edition macroeconomics text, with Abel and Croushore.

    I decided to start a long term project of reading an entire intermediate macroeconomics text cover to cover, without rushing, carefully, with a lot of thinking. And I chose Bernanke’s book. It’s a great project for review of things I learned as an undergrad – and a lot of rethinking and deep thinking – of things years later with a great deal of added knowledge and thinking under my belt since the undergrad days. Plus, there’s a substantial amount of material I’ve never covered. So far I’m up to page 139. With regard to Sumner’s assertion on investment taxes, I just read on page 120:

    Let’s summarize the effect of an increase in the interest rate: For a saver, who is a recipient of interest, an increase in the real interest rate tends to increase saving through the substitution effect but to reduce saving through the income effect. Without additional information, we cannot say which of those two opposing effects is larger. For a borrower, who is a payer of interest, both the substitution effect and income effect operate to increase saving. Consequently the saving of a borrower unambiguously increases…As economic theory does not indicate whether national saving increases or decreases in response to an increase in the real interest rate, we must rely on empirical studies that examine this relationship using actual data. Unfortunately, interpretation of the empirical evidence from the many studies done continues to inspire debate. The most widely accepted conclusion seems to be that an increase in the real interest rate reduces current consumption and increases saving, but this effect isn’t very strong [and this is with adding the unambiguous increased saving effect of borrowers (including servicing debt which is saving); without it, the results could clearly be a zero, or negative, effect from an increase in the real interest rate to savers from a tax cut in say the capital gains rate. Personally, I could really see a lot of people thinking they don't have to save as much per year to reach their retirement or other goals because of a cut in the capital gains rate or other tax spiff.]

    End Quote

    So far Bernanke’s book has been very good – as books of this type go, and I have lots of them. I also like Blanchard’s.

    Others:

    All of Krugman’s books for laypeople, especially, “The Return of Depression Economics and the Crisis of 2008″, “Peddling Prosperity”, and “The Conscience of a Liberal”.

    Frank’s “Luxury Fever”

  2. Franklin says:

    Just put the Cahuc and Zylberberg text on my Amazon wish-list. Looks like an interesting read.

    Although it’s not an economics text, I’ve just finished Stephen Ambrose’s two volume Eisenhower biography. The second volume on Eisenhower’s presidency is a bit of a slog, but still worthwhile reading. The book covers quite a bit of ground on policy debates and various crises during the administration. The political battles seem to have quite a bit of resonance with the present era (e.g. interesting to see how the GOP Old Guard — the Hooverite socially conservative wing has pretty much taken over the GOP — Ike clearly lost that particular battle).

    Currently I’m reading a history of the U.S. labor movement from approximately 1880 until the mid-1980s “Workers in Industrial America” by UC Davis history Prof David Brody. It’s a quick and dirty survey of the labor movement in the U.S — very accessible and well written.

    J.K. Galbraith’s the “Great Crash of 1929″ is next in the que.

  3. chrismealy says:

    This summer I read Polanyi’s “The Great Transformation.” I actually bought last year when I saw it on the sidebar here. I liked it, and I agree with his argument as far as I could understand it, but I think he may not have actually proved his case against laissez-faire as well as he could have. I also finished my slog through Bowles’s “Microeconomics.” It’s great, and it shook me up a few different ways, but now that my econ 101 foundation has crumbled I feel lost. I need a new set glib parables to extrapolate from.

    I just read a few chapters in Cahuc and Zylberberg’s “The Natural Survival of Work” (thanks library of the internet!) Pretty standard neoliberal stuff, but slightly more humane (I liked this: “The job of looking for work is one of the most profitable for society as a whole. It ensures the reallocation of the labor force toward the most efficient jobs, and thus constitutes an essential source of growth. The search for a job is thus an economically useful activity; it should be remunerated as such.”)

  4. Peter T says:

    Chrismealy

    You might like to follow up with Sandra Halperin’s critique of Polanyi – War and Social Change. There’s a lot in there on the 19th century that made me think hard about the big picture I used to have.

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