Department of Economics

University of Chicago Department of Economics

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

Economics 350, Winter 2023: Syllabus

Instructor: James J. Heckman

  • Lectures: Tuesdays and Thursdays, 5:00pm – 6:20pm
  • Classroom: Saieh Hall 141
  • 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.

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 their grades. In addition, each week all students (including auditors) 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 and classroom participation: 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 Topics

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

Topics Covered

Inequality, Social Mobility (within and across generations)
  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?)
    3. Transfers, welfare dependence, social transfer programs, and the growth of the welfare state
  2. Roles of:
    1. Abilities, skills, and prices; skill prices vs. rates of return
    2. Credit market constraints: Lending and borrowing
  3. Income Dynamics within the Lifecycle
    1. Income
    2. Labor supply
  4. Life Cycle Skill and Preference Formation
    1. Parenting and production of traits, skills, and capacities
    2. Traditional human capital models (OJT; schooling)
    3. Learning by doing
  5. Tasks and Skills
    1. Definition of tasks and relationship with skills
    2. Hedonic models, sorting, and endogenous tasks
  6. Labor supply, incentives, and public policy
    1. Growth of the welfare state
    2. Disincentive to work
  7. Families
    1. Household models
    2. Marriage markets
    3. Fertility
  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?
    1. Sorting, peer effects, and neighborhoods

Proposed Reports for 350

(Task Force Reports)

Instructions

Please form groups of four or fewer and have your group select one of the three available topics (or a separate topic of your choosing) by the beginning of the TA discussion session by the TA session on January 13, 2023. If you cannot find a group, come to the TA session and we will try to find one for you. If your group is unable to attend, have a representative of the group email the TAs the names of each group member and the chosen topic by 3:30PM on January 13, 2023. Auditors are encouraged (but not required) to form groups either with students taking the class for credit or amongst themselves.

The culmination of your Task Force Report will be a 15-30 minute presentation at the end of term summarizing the state of the literature and proposing some new ideas extending the state of knowledge on the topic you are presenting. Further details will be discussed after we cover the topics in class.

Available topics:
  1. Succinctly summarize role of firms and institutions in setting wages
    1. Importance of monopoly and monopsony
    2. Hedonics
    3. Pass-through literature
  2. Contributions of neighborhoods, schools, and families on social mobility (intergenerational)
  3. Disincentive effects of the welfare state
    1. Impacts on labor supply (participation and hours of work)
    2. Impacts on family formation
    3. Impacts on the acquisition of skills