ECON7004 - Economics of Industrial Relations

This module is available in Term 2

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This module aims to provide a balance between the institutional approach that has been followed by students of industrial relations for many years and various modern developments in labour economics. We rely on economic theory to structure thoughts and study the empirical literature to link these thoughts to reality.

The first part of the course deals with the key human resources issues of recruitment, retention and motivation. Topics covered include employee selection, design of optimal piece rates, advantages and disadvantages of seniority-based pay, tournaments and promotions, and incentives in team production. In this part of the course we assume that employees are represented individually in the employment relations. In second part of the course we look at what happens when unions enter the picture. We analyse how wages and employment are set according to various union models and then use our theoretical understanding of unions to critically discuss the empirical literature on the wage an employment effect of unions


By the end of the module students should be equipped with an understanding of the operation of labour markets, their main institutional features and the economic analysis of employment contracts.

Taught by:
Parama Chaudhury
Assessment: 20 hours of lectures and 4 compulsory tutorial classes. Coursework consists of 4 problem sets, one for each class, which typically include some exercises and/or short written assignments. Students are required to submit coursework for 3 out of 4 classes. There will be an unseen 2-hour written examination in Term 3.
Suitable for:
2nd / 3rd year Economics (L100), 3rd year Econ/Stats (LG13) and Phil/Econ (VL51) students
Prerequisites: ECON1001: Economics (or equivalent). Students should also have taken (or be taking concurrently) ECON2001: Microeconomics.
Maximum module enrolments: 60
Module Evaluation (Previous year): ECON7004
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