Economics and Finance

General objectives. In summary, the general objective is to show the role of market mechanisms and the main institutions typical of the labour market in determining the variables of primary interest for social welfare, in terms of both efficiency and equity. Firstly, the course provides knowledge of the basic theoretical models for understanding the functioning of the labour market and its institutions, and the main determinants of employment, wages and unemployment. The theory presented covers first the demand, supply and equilibrium models under conditions of perfect competition, but also includes the main deviations from this model both in theory and with reference to observable reality. From the point of view of theory, the course is mainly at the microeconomic level but it also emphasises the connections with macroeconomic equilibrium, in particular with reference to unemployment. Furthermore, the course provides an introduction to the basic concepts and indicators necessary for the description and empirical analysis of the phenomena concerning labour in advanced economies, and the main stylised facts (as for employment, unemployment, wages in aggregate and their main differentiation by territorial area, gender, age, education), with reference to the Italian reality and that of the main countries comparable to it, at present and its evolution in the recent past. Insofar as the main variables concerning labour are the subject of economic policy choices by governments, the course aims to enable students to develop a broad vision and a critical capacity to compare the various theoretical models with each other and these models with the real issues. With regard to the specific contents of the course, after introducing labour supply and demand and the competitive equilibrium, as well as its properties of efficiency and equity, some policies such as the minimum wage and payroll taxes are considered, whose redistributive effects and those on employment and unemployment levels are considered. Furthermore, the theory of discrimination and some tools for its empirical analysis are introduced. On the labour supply side, the course includes the theory of human capital, which describes the motivations behind individual educational choices and predicts their consequences in terms of wages. Workplace training of workers is also considered. In addition, the theory of international migration is presented with a focus on its effects in the labour markets of the receiving countries. The course then goes on to present the main deviations from the perfectly competitive labour market. First, the case of the presence of trade unions and collective bargaining and the analysis of their consequences in terms of wages and employment. Secondly, the case of market power on the corporate side, with the so-called monopsony model. In addition, a number of useful models are considered for analysing salient aspects of relations between workers and employers. In particular, some notions of market failures will be applied, such as information asymmetries, which are useful in explaining involuntary unemployment. Finally, some relevant macroeconomic models, the concept of steady-state unemployment equilibrium and the Beveridge curve will also be presented with particular reference to the unemployment issue. In the course, exercises are planned to apply the main models with quantitative examples and exercises. In addition, a number of concrete cases relating to issues of particular relevance in Italy or other comparable countries will be presented, showing the data describing the phenomenon, its evolution over time and discussing the policies proposed or applied in view of the objectives set. Specific objectives. More specifically, the course aims to provide the student with: A) the knowledge of the main labour market theories starting from the perfect competition model but also considering models that examine non-competitive situations and market failures; B) the ability to critically compare the assumptions and implications provided by the various theoretical models; C) the ability to apply the theoretical models and empirical tools acquired to examples of real labour market problems that are discussed in class; D) the ability to distinguish cyclical influences and structural factors in the evolution of the labour markets and to formulate appropriate intervention hypotheses as a remedy for specific problems; E) a basic knowledge of the reality of the labour market in Italy and other advanced economies and the main policies and institutions that regulate its functioning.