Lecture 1


This lecture is an introduction to the course materials, and in particular to one of the important challenges we will confront, not just in this course as labour economists but in general as observers of social behaviour.

This is the challenge of making rigorous and appropriate causal inferences from observational data as it applies to important issues in the economics of work and pay. The “ideal” or “gold standard” solution, as many have put it, is Randomized Controlled Trials. We begin our discussion of RCTs, laying out an intuitive framework in a way that sets the groundwork for thinking about labour supply decisions and income transfers to individuals, a topic we explore in detail in the next lecture.

Download a pdf of the lecture presentation.

The main readings for this lecture are

Gary Burtless (1995). “The Case for Randomized Field Trials in Economic and Policy Research.” Journal of Economic Perspectives. Vol. 9 No. 2 (Spring), pages 63-84.

James J. Heckman and Jeffrey A. Smith (1995). “Assessing the Case for Social Experiments.” Journal of Economic Perspectives. Vol. 9 No. 2 (Spring), pages 85-110.

But in order to more fully explore these issues and to prepare for the upcoming assignment you should explore the other readings in Section 1(a) of the course outline.