Department of Economics

University of Chicago Department of Economics

Syllabus Lecture Notes Problem Sets Some Suggested Reading (SSR) Supplemental Guest Lectures PRIVATE KEY Reports by Week

Economics 350, Winter 2023: PRIVATE Syllabus

Instructor: James J. Heckman

  • Lectures: Tuesdays and Thursdays, 5:00pm – 6:20pm
  • Classroom: Saieh Hall 103
  • Teaching Assistants:

Occasionally, the instructor may use a TA session to supplement or make up a class.

If you experience problems with this website, please contact Jennifer Pachon.

Course Description

This course examines the theory and evidence about inequality and social mobility (within and across generations). We focus on skills broadly defined to include preferences and motivations, how they are produced, their pricing, and their supply to the market.

Lecture Plan

Inequality and Social Mobility

  1. Measures (wealth, income, earnings, health, employment and labor supply)
    1. The claims, the evidence and the quality of evidence
    2. Units of measurement (persons, households, extended families?)
  2. Roles of:
    1. Skills and prices; skill prices vs. rates of return
    2. Transfers, welfare dependence, social transfer programs, and the growth of the welfare state
    3. Credit market constraints: Lending and borrowing
    4. Sorting, peer effects, and neighborhoods
  3. Which skills?
    1. Abilities and capacities to act
    2. Preferences, motivations and self control, including morality
  4. Tasks and Skills
    1. Definition of tasks and relationship with skills
    2. Hedonic models, sorting, and endogenous tasks
  5. Life cycle skills
    1. Parenting and production of traits, skills, and capacities
    2. Traditional human capital models (OJT; schooling)
    3. Learning by doing
  6. Labor supply, incentives, and public policy
  7. Families
    1. Parental influence: parenting, parental styles and production of preferences and traits
    2. Marriage markets
    3. Fertility
    4. Investment
  8. Markets and Technology
    1. Monopsony and monopoly: impacts and inequality
    2. Technology: AI, innovation, robots, and skill-biased technical change
  9. Neighborhood and Peer Effects: Is zip code destiny? Does geography matter for life outcomes?

Grading

This is a seminar-style course based on weekly student participation by all students (including auditors) guided by faculty lectures and TA review sessions. For each topic, we will select a few leading papers to be discussed by the entire class. Choice of topics and papers will be influenced by student preferences. Different students will be designated to lead discussions and the quality of the discussion figures into grades. In addition, each week all students will be asked to assess the papers discussed in a concise, 2-3 page summary. Student engagement in the weekly reports will receive credit. In addition, there will be some homework exercises to cement understanding of the material. This may entail some empirical work applying the methods learned. There will be a take-home final synthesizing class material.

Grades are determined as follows:

  1. Weekly reports: 30%
  2. Homework: 20%
  3. Final exam: 50%

Bonus credit will be given for active, informed participation, high-quality dissent, and insightful final exams.

Lecture Notes

Lecture notes for each week will be posted on the Canvas site in advance of each lecture on the website. Handouts distill and complement the readings.

Supplemental Reading List

The Some Suggested Reading list contains paper of interest for this course. Background material on methodology and additional readings on each topic are available on the Supplemental Reading List which gives students detailed information on frontier papers.

Required Reading

Before class meets, read Gramm, Phil, Robert Ekelund, and John F. Early. (2022). The Myth of American Inequality: How Government Biases Policy Debate. New York, NY: Rowman and Littlefield.

Week by Week General Topics

  1. Inequality and Social Mobility: Surprising Facts and Basic Measures That Challenge Conventional Claims
  2. Skills and Schools
  3. Preferences as Skills: Preference and Habit Formation
  4. Tasks, Occupations, and Skills
  5. Labor Supply and Incentives
  6. Family Influence: Genes, Parenting, and Credit Constraints
  7. Neighborhood and Peer Effects
  8. Monopoly and Monopsony as Sources of Inequality
  9. Impacts of Public Policy