Academic journal article Monthly Labor Review

Labor Economics through the Eyes of Three French Economists

Academic journal article Monthly Labor Review

Labor Economics through the Eyes of Three French Economists

Article excerpt

Labor Economics, second edition. By Pierre Cahuc, Stephane Carcillo, and Andre Zylberberg. Translated by William McCuaig. Cambridge, MA: The MIT Press, 2014, 1043 pp., $125.00/cloth.

Labor Economics is a textbook designed to give graduate students a comprehensive introduction to the subject, with empirical results that integrate with theory. The breadth of coverage is recent work in major areas of labor economics, including new empirical, theoretical, and methodological developments. Lessons are presented on a global level, using examples from various countries with proven empirical methods that have served as milestones for the area of study. This edition provides an analysis of public policy, with theories supported by models that have been simplified for the reader's benefit.

The authors are highly qualified experts in the field of labor economics. Pierre Cahuc is a professor of economics at France's Ecole Polytechnique. He also serves as the director of the Macroeconomic Laboratory at the Center for Research in Economics and Statistics (that country's National Institute for Statistic and Economics Studies); is the program director at IZA (the Institute for the Study of Labor) in Bonn, Germany; and is a member of the Council of Economic Analysis of the Prime Minister of France. Stephane Carcillo is an associate professor of economics at the University of Paris 1 PantheonSorbonne. He serves as a senior economist in the Directorate for Employment, Labor, and Social Affairs at the Organisation for Economic Co-operation and Development in Paris. He is also a research fellow in the Department of Economics at Sciences Po (Paris), as well as at IZA. Andre Zylberberg is the emeritus research director at the Centre National de la Recherche Scientifique of the French Ministry of Education and Research, and is a member of the Paris School of Economics.

Public policy issues are highlighted throughout the text. The chapter on education and human capital points out that countries spend, on average, 6.3 percent of their gross domestic product on publicly financed education, with few exceptions. The average time one spends in school has increased over time, correlating with better performance in the labor market and less crime. Human capital theory predicts that higher education increases the likelihood of higher wages. However, "the ability to resolve differential equations or to understand all the subtleties of Keynesian macroeconomics," note the authors, "does not necessarily increase the productivity of a person working in a firm or an agency" (p. 208).

According to the authors, generous unemployment benefits have been shown to decrease the time devoted to seeking employment. Using data from the Bureau of Labor Statistics American Time Use Survey to evaluate how employed and unemployed people spend their time, they found that unemployed people spend an average of 32 minutes per day seeking employment. They argue that unemployment benefits slow the rate at which those receiving benefits get job offers by eroding the efficiency and lessening the intensity with which they seek employment. …

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