Otto-von-Guericke-Universität Magdeburg


Seminar: Microeconometric Tools for Labor Market Research and Policy Evaluation

This course covers relevant topics from modern labor economics. It is designed to provide students with a sound understanding of the microeconometric tools that form the foundations of state-of-the-art empirical economic research. We will work through contents in an open atmosphere to stimulate questions and student participation, trigger scientific debates, and facilitate small research projects. Topics include the rise in wage inequality, wage discrimination, job displacement, and worker participation and we will cover microeconometric tools as Instrumental Variable Estimators, Regression Discontinuity Designs, and Fixed Effects and GMM estimators.

  Prof. Dr. Steffen Müller
  Verena Plümpe (course administration)

Wednesday, 11am-1pm, room G22A-120

Please note that enrolment requires a personal identity card and takes place on October 16th.

For further information please visit the course site on the new e-learning portal or on the lsf.


Seminar Topics:


Causal Inference

After having managed the organizational issues like seminar subscription and the assignment of topics, we will use this lecture to clarify what a causal statement in microeconomics is, what it distinguishes from pure observational coincidence and when we are interested in the former or the latter. Building on the standard potential outcome framework we discuss the various empirical designs researchers may face and the implications that can be drawn from the respective results.

Active Labor Market Policy

Active Labor Market Policy (ALMP) programs are government programs that intervene in the labor market to help the unemployed to find work; measures that aim to improve functioning of the labor market and that are directed towards the unemployed. Germany spends several billion Euros on these programs each year. We introduce the matching estimator as a tool to evaluate the success of ALMP programs. 

Wage Discrimination

On average, women earn substantially less than men in all developed countries. We discuss potential sources for this pay gap and introduce Oaxaca-Blinder decompositions and two-way fixed effects estimation techniques.

Economic Failure and Job Displacement

Plant closures, bankruptcies, and mass layoffs are necessary adjustment processes in a dynamic market economy and grease economic development. However, they are also often painful events for employees. This lecture discusses the short- and long-term consequences of job displacement for individual careers and discusses potential explanations for the often observed long-term earnings losses of displaced workers. We will introduce fixed effects panel estimators with distributed lags.

Human Capital

Human capital is widely perceived as the main driver of economic growth and individual economic success. In this section, we will briefly review the core elements of Gary Becker's Human Capital Theory and turn to Jacob Mincers famous wage equation. Having understood that, we touch the endogeneity problem arising when estimating the return to education via OLS and then more carefully introduce the core elements of instrumental variable estimation.

Class Size and Learning

We start out from what economists call a learning production function where class size and teacher quality are inputs (among others). Policy makers and the public in general care about whether more teachers per student improve student achievement. We discuss the topic in general and learn about the STAR experiment or Maimonides Rule. Our technical focus will be on field experiments and regression discontinuity designs.

The Economics of Workplace Democracy

Capital-labor relations are at the core of the "Varieties of Capitalism" approach. In Germany, these relations build on two pillars: sector-level unions and plant-level works councils. This lecture discusses the effects of works councils on economic performance theoretically and explains the challenges for an empirical investigation. We then introduce control function estimators that deal with self-selection into treatment based on unobservables.



Course Announcement

Seminar Guidelines


Angrist, J.D. & Krueger, A.B. (1999): "Empirical Strategies in Labor Economics", in: Handbook of Labor Economics 3, pp. 1277-1366.


Letzte Änderung: 15.10.2019 - Contact Person: Webmaster