TrainingsMasterEconomicsCoursesLabor economics

Master EconomicsUE Labor economics


The goal of this course is to provide the modern theoretical tools to model aggregate labor markets. We emphasize the role played by matching frictions, which summarize the mix of information imperfection and mobility costs for job-seekers and potential employers. The course covers individual behavior in frictional environments, measurement of unemployment inflows and outflows, the matching function, equilibrium search unemployment, unemployment compensation and job protection. Theoretical mechanisms are illustrated by case studies, calibrations and use of macro data.

Course outline :

Chapter 1 : Job search and unemployment compensation

  • 1.1 Stationary job search
  • 1.2 Accounting for non-stationarity
  • 1.3 Unemployment compensation
  • 1.4 Extensions

Chapter 2 : Unemployment inflows, outflows, and the matching function

  • 2.1 Unemployment inflows and outflows
  • 2.2 Beveridge curve
  • 2.3 Matching functions
  • 2.4 Microfoundations

Chapter 3 : Equilibrium search unemployment

  • 3.1 Model assumptions
  • 3.2 Equilibrium with exogenous wage
  • 3.3 Equilibrium with wage bargaining
  • 3.4 Efficient unemployment

Chapter 4 : The economics of job protection

  • 4.1 What is Employment Protection Legislation ?
  • 4.2 Transfers vs deadweight costs
  • 4.3 Labor market impacts of EPL
  • 4.4 EPL and the legal origins of the judicial system

Professional skills

The course stimulates problem solving skills. By the end of the course, the students will be able to write models of the aggregate labor market to study various employment policies, calibrate these models on aggregate data, solve Bellmann equations, discuss the effects of changes in the unemployment compensation scheme or in employment protection legislation, and relate theoretical models to empirical studies.

Language used

Main language used by this course: Anglais.


  • Cahuc, P., Zylberberg, A., 2014. Labor Economics, MIT Press
  • Pissarides, C., 2000. Equilibrium unemployment theory. MIT Press
  • Des références additionnelles, principalement des articles de recherche, seront données lors de chaque séance.

Fundamental prerequisites

The course is fairly technical : integration problems, differential equations, statistics and probability, numerical solving of equations. However, these skills will be developed during the course through numerous exercises.

Structure and organisation

This is a 24-hour course. The evaluation is composed of two parts : a final written exam (75%) and a mid-course assignment (25%). The website of the course contains lecture screens, exercises and their corrections, and past exams :

Volume of teachings

  • Lectures: 24 hours

The trainings which use this course