UCL Department of Economics


Economics of Industrial Relations - ECON0049

ECON0049 > undergraduate module > 2019/20.

Taught by: Parama Chaudhury.
Intended teaching term: Term 2.
Credits: 15 (FHEQ Level 6).

Syllabus: Industrial Relations.
Year: 2/3.

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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.

Suitable for

  • 2nd / 3rd year Economics (L100 / L101 / L102);
  • 3rd year Econ/Geog (LL17);
  • Econ/Stats (LG13);
  • Phil/Econ (VL51);
  • PPE (4V86);
  • BASc students subject to the pre-requisite(s) below. 


Completion of the first term of ECON0013 or equivalent (note assumed knowledge).

Assumed knowledge

Students coming into the module should understand concepts relating to profit maximisation under different market structures, consumer theory, supply and demand analysis, welfare effects of taxes and subsidies, the effects of information asymmetry, the concept of a Nash equilibrium, the basics of common statistical distributions including uniform and normal, and an understanding of how to interpret regression models (including with dummy variables and fixed effects).

Teaching and assessment

- 20 hours of lectures with 4 compulsory tutorial classes.
- All assessment is in term-time (no summer-term exam). Summative assessment (% weightings in brackets):

  • In-class tests (15%);
  • Group poster presentation (20%);
  • 'Take home' case study report of 1200 words to be submitted at the start of the following term (30%);
  • End of term MCQ exam on Moodle (35%).