Discuss reasons for the pattern of increasing wage inequality over time in the UK and other similar economies. What policies would

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Discuss reasons for the pattern of increasing wage inequality over time in the UK and other similar economies. What policies would you recommend to reduce wage inequality in the UK?

Economics of Labour Essay

Please choose one of the following questions:

1) Discuss reasons for the pattern of increasing wage inequality over time in the UK and other similar economies. What policies would you recommend to reduce wage inequality in the UK?

2) Why might horizontal and vertical mismatches, and skill shortages, exist in the labour market and are these necessarily evidence of market failure? What policies would you recommend implementing to tackle such mismatches and skill shortages in the UK?

3) How would we measure the effect of immigration on wages and employment opportunities? Critically evaluate the effect of immigration on the wages and employment opportunities of natives in countries such as the UK.

4) Discuss how different types of compensation schemes may solve the principal-agent problem? Critically evaluate whether the levels of executive compensation in countries such as the UK are justifiable?

5) Critically evaluate the effectiveness of labour market policies designed to encourage labour force participation and improve welfare in the UK. Which policies would you recommend to encourage labour force participation and improve welfare in the UK?

Essay Guidelines

• The word count is 3,000-4,000 words.
• Each question expects you to consider the theory, previous empirical research and relevant policy for that question – how much you focus on each of these aspects will depend on the topic and your arguments.
• The questions are typically aimed at the UK case but there is ample scope to using evidence and examples from other countries, particularly when discussing policy
• Whilst it is not expected you will do any econometric analysis for your essay, you may want to make reference to empirical results of studies and provide some statistics (maybe in the form of a table or a graph) to back up your arguments – a list of potentially useful data sources is provided in the module handbook. Please make sure you clearly reference any data sources.
• References are provided in the module handbook and the lecture slides for each topic to get you started.