Suggestions for incremental change to labour economics courses, drawn from the ten building blocks of Economy Studies.
Change often happens incrementally and slowly. In the economics textbook market, for example, there is an unwritten rule that new textbooks cannot differ more than roughly 15% from the standard textbook in order to be ‘acceptable’ (Colander, 2003).
While our book clearly breaks this rule and proposes more far-reaching and fundamental changes in most chapters, in this chapter we focus instead on how existing courses could be adjusted incrementally. By doing so, we hope to assist educators in improving and adapting the courses they teach without needing to rip them up and start again, as well as helping students make suggestions for how this could be done.
First, we set out the typical contents of current courses. Second, we provide our suggested additions and changes. It is important to note that we pose all these suggestions as potential sources of inspiration, not a checklist of all the things that necessarily should be included. After all, there is a practical limit to what can be taught within a single course.
Typical contents of current courses
Courses on labour economics currently typically focus on neoclassical (and often microeconomic) models about supply and demand on labour markets. These useful intellectual tools provide valuable insights into a wide-range of topics, from labour supply, wage determination, and human capital, to unemployment, the minimum wage, and inequality. Courses often pay substantial attention to both theoretical mathematical models and empirical econometric research.
Frequently used textbooks:
- Labor Economics by George Borjas
- Labor Economics by Pierre Cahuc and Andre Zylberberg
- Modern Labour Economics by Peter Sloane, Paul Latreille, and Nigel O’Leary
- Labor Economics: Introduction to Classic and the New Labor Economics by Derek Laing
Suggested additions and changes
Practical skills and real-world knowledge
For many students the world of work, especially full-time work, is still a relatively abstract concept. They have seen other people around them do it, such as their parents, and surely learned from those people’s experiences. But they generally have little personal experience with being a worker. Therefore it can be worthwhile to let students explore the real world of work in a course on labour economics, for instance through conducting interviews. Furthermore, exposing them to different realities related to labour can help them grasp the issue beyond their own experiences.
It can be useful to introduce students to important economic institutions and organizations related to labour, such as unions, social-economic councils, and ministries of social affairs and employment. This can, for example, be done with the help of readings, a lecture by the teacher him or herself, a guest lecture, a visit, and applied exercises. Furthermore, it can be informative to discuss current issues and (public and academic) debates related to labour.
For more detail, see Building Block 2: Know Your Own Economy and Building Block 9: Problems & Proposals.
A range of analytical tools and approaches
Besides neoclassical economics there are a number of other schools who have also contributed valuable (complementary) insights to the field of labour economics. A key theoretical approach, in this regard, is Marxian economics, in which labour economics takes a central role. Marxian economics has developed various useful concepts, such as alienation and exploitation, related to both labour relations and the production processes itself.
Another useful approach comes from the cultural scholars, which have focused on how work provides people not only with income but also with a sense of dignity and identity. Other useful insights come from social network analysis and feminist economics, respectively relating to the importance of social connections and weak ties in particular, and the workings and subtleties of gender and ethnic discrimination as well as the importance of unpaid labour in economies. Debates about households and how decisions related to the labour performed there are made could for this reason also be incorporated into labour economics courses.
Finally, when discussing theories, it can be of serious added value to discuss (recent) empirical (meta) studies. There are, for example, various opposing theories on what effects of the minimum wage is. To enable students to assess the value of these theories, empirical evidence is crucial. Furthermore, it can be very educational for students to learn how to understand and critically read empirical papers. As such, devoting time and even full lectures on discussing important empirical studies can be worthwhile.
For more detail, see Building Block 7: Research Methods & Philosophy of Science, Building Block 8: Economic Theories and the sections Labour and Households in the background material Pragmatic Pluralism.
- The Handbook of Pluralist Economics Education by Jack Reardon, from 2009, chapter 11. This useful book on how to diversify economics programs, includes a chapter full of ideas and suggestions for courses on labour economics.
- Economics: The User’s Guide by Ha-Joon Chang, from 2014, chapter 10. This brief and accessible pluralist book contains a useful introductory chapter on work and unemployment.
- Economics After The Crisis by Irene van Staveren, from 2015, chapter 8. This well-written textbook which in one chapter sets out the neoclassical, post-Keynesian, social economic and institutional perspectives on labour markets.
- The Economy by The CORE Team, from 2017, chapters 3, 9, 14 & 16. This successful textbook introduces students to economics of work, labour markets, unemployment and technological change.
- Introducing a New Economics by Jack Reardon, Maria A. Madi, and Molly S. Cato, from 2017, chapters 6 & 7. This ground-breaking textbook introduces work and unemployment and weaves together pluralist theory and real-world knowledge.
- Principles of Economics in Context by Jonathan Harris, Julie A. Nelson and Neva Goodwin, most recent edition from 2020, chapter 10. This useful textbook, which pays particular attention to social and environmental challenges, contains a chapter on labour markets.
- Capitalism: Competition, Conflict, Crises by Anwar Shaikh, from 2016, chapters 4, 6 & 14. This impressive and extensive book compares multiple perspectives on many traditional economic topics including production, wages and unemployment.
- The Routledge Handbook of Heterodox Economics: Theorizing, Analyzing, and Transforming Capitalism by Tae-Hee Jo, Lynne Chester, and Carlo D’Ippoliti, from 2017, chapters 25 & 35. This broad and diverse book sets out a variety of theories on labour processes and full employment.
- Alternative Ideas from 10 (Almost) Forgotten Economists by Irene van Staveren, from 2021, chapter 5. This book emphasizes often ignored and neglected ideas and contains chapters on the ideas of Barbara Bergmann on gender biases.
- The Handbook of Economic Sociology by Neil J. Smelser and Richard Swedberg, from 2005, chapters 12, 14, 17 and 25. This extensive and yet accessible book for non-sociologists, provides an impressive and useful overview of the field of economic sociology, including four chapters on labour markets and trade unions, work and occupations, networks, and education.
- Labour: A Heterodox Approach by Jean Vercherand, from 2014. This short book introduces students to the economics of labour in a pluralist and historically grounded way, paying attention to classical, neoclassical, Keynesian, Marxian and Schumpeterian theories and ideas.
- Economics of Imperfect Labor Markets by Tito Boeri and Jan van Ours, from 2013. This advanced textbook focuses on the economics of labour market institutions, such as minimum wages, unemployment policies, employment regulation, family policies, wage negotiations, pensions, education and migration policy.
- The Sociology of Work: Continuity and Change in Paid and Unpaid Work by Stephen Edgell, from 2005. Another, but more recent, introduction into work, focusing on de- and upskilling, alienation, fordism, unemployment, globalization, and industrial, service, domestic, non-standard and home work.
- The Oxford Handbook of Women and the Economy by Susan L. Averett, Laura M. Argys, and Saul D. Hoffman, from 2018. One-third of this collection of essays is devoted to the role and position of women in the labour market, including chapters on the gender wage gap, labour force participation, racial differences, taxes, and the feminist perspective.
- Handbook of Labor Economics by Orley Ashenfelter & David Card, most recent edition from 2010. A collection of essays on recent research on labour markets, focusing on racial and gender inequality, human capital development and intergenerational mobility, institutional reforms and imperfect competition, and lifecycle choices and expectations.
Institutions and different ways of organising the economy
Changes in the organisation of labour processes have been fundamental to economic developments. As such, it can be useful for students to learn about the different ways of organising labour, from the top-down scientific management, also known as Taylorism, to decentralised and democratic governance structures and styles, such as holacracy.
For more detail, see Building Block 5: Economic Organisation & Mechanisms and the section Labour in the background material Pragmatic Pluralism.
- Industrial Relations: Theory and Practice by Michael Salamon, most recent edition from 2000. This textbook introduces students to the various theoretical and normative approaches to industrial relations as well as its different actors and institutions.
- The SAGE Handbook of Industrial Relations by Paul Blyton, Edmund Heery, Nicolas Bacon, and Jack Fiorito, from 2008. This impressive interdisciplinary collection of essays covers many aspects of industrial relations, from its various theories, changing institutions, the interactions between governments, employers and workers, and the outcomes in terms of pay, wellbeing, inequality and business performance.
- Democracy at Work: A Cure for Capitalism by Richard D. Wolff, from 2012. A provocative book arguing that the solution to today’s economic problems is the democratization of workplaces through workers’ self-directed enterprises.
- Firms as political entities by Isabelle Ferreras, from 2017. This informative book looks at the power dynamics within companies and advocates for founding corporate governance on bicameralism, meaning that capital and labour are represented through two chambers and together run the company.
Societal relevance and normative aspects
Work is an enormous part of all our lives and debates about it are often also at the centre of political and economic issues, whether it might be negotiations between a labour union and the managers of a company about the labour conditions or a political debate about raising the minimum wage. As such, labour economics is a highly relevant and important field, as well as one in which normative aspects are often prominent. Therefore, it can be informative and useful for students to become familiar with the different normative perspectives on labour issues. Here it is also key that students learn to understand and spot power (im)balances and relations.
Work is, however, not only of great normative importance, it conceptually also an important and unique economic resource. Prasch (2003), for example, writes that labour is unique because it cannot be separated from its providers, cannot be stored, is self-conscious, and is the one production factor that most of us wish to see well compensated. Letting students think and talk about the seemingly simple question ‘what is labour?’ can therefore be a great addition and introduction to a labour economics course.
For more detail, see Building Block 1: Introducing the Economy and Building Block 10: Economics for a Better World.
- How is Labor Distinct from Broccoli? by Robert Prasch, from 2003. This thought provoking article helps students understand what the unique characteristics of labour are.
- The Routledge Companion to Social and Political Philosophy by Gerald F. Gaus, Fred D’Agostino, from 2013, chapter 65. This impressive collection of essays on normative ideas and concepts includes a chapter on the social and political philosophy of work.
- The Routledge Handbook of Ethics and Public Policy by Annabelle Lever and Andrei Poama, from 2019, chapter 23. This useful collection of essays treats many different aspects of the ethics of public policy, including a chapter on gender-egalitarian policies in the workplace and the family.
- The Oxford Handbook of Ethics and Economics by Mark D. White, from 2019, chapters 18 and 26. This extensive collection of essays explores the many moral dimensions of economics, including two chapters on civil rights, employment and race, and ethics and, in, and for labour markets.
Courses on labour economics could be enriched by paying attention to history in one or a few lectures. This could, for example, be a way to introduce students to the topic and show to them how fascinating, lively and important it is. Labour history is a well-established academic field from which economics teachers could make use in their courses on labour economics. When discussing the history of labour, one can also briefly include developments in economic thinking about the matter. When discussing the 19th century and industrialization, one could, for example, briefly describe the ideas of economic thinkers of those times, such as David Ricardo and Karl Marx.
For more detail, see Building Block 3: Economic History and Building Block 4: History of Economic Thought & Methods.
- The Sociology of Work: Continuity and Change in Paid and Unpaid Work by Stephen Edgell, from 2005, chapter 1. This chapter provides students with a useful overview of how work has been transformed multiple times throughout history, whether it was the emergence of industrial capitalist work, rise of trade unions, or changes in the work women performed.
- Histories of Labour: National and International Perspectives by Joan Allen, Alan Campbell and John McIlroy, from 2010. This insightful collection of essays introduces students to the labour histories of various countries such as India, the United States, and Germany.
- Transnational Labour History: Explorations by Marcel van der Linden, from 2003. This book explores how labour movements developed in different countries and in interaction with each other.
- General Labour History of Africa: Workers, Employers and Governments, 20th-21st Centuries by Stefano Bellucci & Andreas Eckert, from 2019. A highly insightful collection of essays on the labour history of Africa, with chapters focusing on among other things wage, precarious, informal, illegal, forced, domestic and entrepreneurial labour as well as the role of the state, unions, cooperatives, and the international labour organization.
- The Worldly Philosophers: The Lives, Times and Ideas of the Great Economic Thinkers by Robert Heilbroner, most recent edition from 1999. While first published in 1953, it remains perhaps the best introduction into the history of economic thought to this day. In a remarkably well-written and accessible manner it discusses the ideas of key economists and puts them into historical context.
- Work: A Deep History, from the Stone Age to the Age of Robots by James Suzman, from 2021. A fascinating description of how our understanding and practices surrounding work have changed throughout history.
What to take out
To create space for the above suggested additions, we advise to focus more on the key ideas and intuitions behind the taught models and devote less teaching time to their technicalities and mathematics. As teaching students to reproduce and work through mathematical models often takes up a large part of the teaching time, this would give the teachers the opportunity to devote more time to practical knowledge, the relevance, institutions, and history. Furthermore, a more even balance between neoclassical economics and other economic approaches could be achieved by decreasing the number of neoclassical ideas and models that are taught.