Answering empirical research questions in a credible way is challenging. The methods covered by most standard econometrics classes typically impose strong assumptions that are hard to justify in many applications. This course focuses on the main empirical research methods that aim to answer empirical research questions with as few assumptions as possible. The objective of this course is to enable students to understand and apply these methods. We will also compare these methods to the methods taught in standard econometrics classes. We illustrate the methods using key applications from labor economics that are easy to understand by students from different backgrounds.
Methodologically, the course will cover the following:
1. Introduction to causal analysis
2. The potential outcome model
3. Identification versus estimation
4. Method 1: Exploiting rich data to handle endogeneity issues
5. Method 2: Exploiting exogenous variation with an instrumental variable
6. Method 3: Exploiting policy discontinuities with a regression discontinuity design
7. Method 4: Exploiting policy changes with a difference-in-differences approach
We illustrate each method with interesting applications from labor economics where we focus on the challenges involved in applying the methods and how to master them.

The course targets two groups of students. The first one is students with particular interest in labor economics. The course will inform students how to answer important questions of empirical labor economics in a credible way. This covers questions such as
• How to measure gender pay gaps, returns to education or compensating wage differentials?
• What are the labor market effects of immigration on natives and migrants?
• Are training programs and other measures effective in improving the labor market prospects of unemployed workers?
• How to measure the work disincentive effect of social insurance?
• What are the effects of firm policies such as flexible working time, different remuneration schemes or health measures on various employee and firm outcomes such as motivation, health, turnover or firm performance?
The second group of students targeted by this course includes master students and beginning PhD students who consider writing an empirical master thesis or conducting empirical research with micro-level data (e.g. of individuals, households or firms). Although we use applications from labor economics, the methods we cover in this course are widely applicable to all kinds of research questions and fields. The applications will help better understanding the challenges involved in applying these methods, which is crucial for any application one may have in mind.

Master students who successfully complete the course "Empirical Research Methods in Labor Economics" with a good grade will be invited to write their master's thesis under the supervision of Prof. Wunsch with the opportunity to select from a list of interesting topics.

For more information, see the course directory.

All course material will be posted on ADAM.