Behavioral Labor

Behavioral Labor is a 10-week flagship special-topics course on how nonstandard preferences, nonstandard beliefs, and nonstandard decision-making reshape labor-market behavior, labor-market institutions, and labor-market policy. The course treats the rational benchmark from Labor I as a serious starting point, but not as a complete description of work, search, effort, training, take-up, and job choice once attention limits, expectation errors, self-control problems, social preferences, and complexity matter.

This course exists as a separate field special topic because labor is not just a convenient application of general behavioral economics. Labor markets are a natural domain for behavioral wedges: many choices are dynamic investments, many incentives are complex or opaque, many outcomes are mediated by firms and managers, and many policy margins depend on take-up, salience, and implementation rather than statute alone. Labor I introduces behavioral frictions as a bridge topic. Behavioral Labor turns that bridge into a full, labor-economics course organized around worker behavior, workplace design, empirical identification, equilibrium response, and welfare.

Prerequisites¶

• Labor I or a strong equivalent in worker-side labor economics

• Graduate microeconomic theory

• Introductory applied econometrics

• Willingness to read empirical labor papers, field experiments, and policy-design work

What Students Will Be Able To Do¶

By the end of the course, students should be able to:

1. distinguish behavioral mechanisms from standard heterogeneity, information gaps, and institutional frictions;

2. connect behavioral departures to labor supply, effort, savings, training, job search, take-up, and job choice;

3. evaluate how firms, managers, and policymakers respond to predictable behavioral frictions;

4. assess behavioral labor evidence using experiments, expectation data, quasi-experiments, and structural design;

5. frame research questions that link worker behavior, firm design, policy delivery, and welfare.

Course Format¶

Behavioral Labor is designed as a 10-week advanced special topic for PhD students and strong advanced MA students. The course is reading-heavy, research-oriented, and organized as weekly modules rather than as a broad survey. Each module is meant to support the repository’s layered teaching structure, but the intellectual rhythm is consistent throughout: define the labor-market object, isolate the behavioral wedge, identify the relevant evidence, and ask what follows for firms, policy, and welfare.

The course is intentionally cumulative. The first third builds the taxonomy and core worker-side applications. The middle weeks move into workplace behavior, identity, and allocation. The final third turns to empirical design, policy, equilibrium response, and student research design.

Connection To Labor I And Labor II¶

Behavioral Labor builds directly on Labor I’s worker-side architecture. Labor I ends by showing where the benchmark can fail; this course asks which failures matter most for labor economics and how to study them rigorously. The course also speaks to Labor II because behavioral labor is not only about workers making mistakes. Firms, contracts, market structure, and policy implementation shape which behavioral frictions survive, which are offset, and which become equilibrium objects.

Weekly Sequence¶

• Week 1. What is Behavioral Labor? The opening week defines the field, sets the taxonomy, and explains why labor markets are a natural domain for disciplined behavioral analysis rather than a loose collection of anomalies.

• Week 2. Nonstandard Preferences in Labor Supply, Effort, Savings, and Training. Present bias, commitment demand, risk aversion, reference dependence, and social preferences are mapped into labor supply timing, workplace effort, work-linked savings, and training completion.

• Week 3. Beliefs, Expectations, and Job Search. The course turns to subjective expectations, perceived job-finding probabilities, limited information, perceived competition, and two-sided frictions in job search.

• Week 4. Attention, Salience, Complexity, and Learning. Workers often respond to the contract, schedule, or program they perceive rather than the one on paper, making learning and information design central for taxes, transfers, workplace incentives, claiming, saving, and training.

• Week 5. Incentives, Contracts, Reciprocity, and Workplace Behavior. Behavioral labor moves inside the firm through reciprocity, gift exchange, effort provision, incentive framing, monitoring, supervision, and contract interpretation.

• Week 6. Identity, Norms, Fairness, and Allocation. Social meaning, fairness judgments, peer pressure, team norms, firm culture, and manager transmission shape workplace behavior, job choice, retention, promotion, and worker-firm sorting.

• Week 7. Experiments, Measurement, and Behavioral Identification. The empirical toolkit week asks how labor economists distinguish behavioral wedges from standard alternatives using experiments, expectation data, administrative behavior, and structural discipline.

• Week 8. Firm, Market, and Equilibrium Responses. The course studies what happens once worker-level behavioral wedges enter firms, plan-design markets, search, sorting, and equilibrium adjustment.

• Week 9. Behavioral Public Policy in Labor Markets. Worker-facing policy is revisited through take-up, simplification, reminders, default design, targeting, implementation, and endogenous market response.

• Week 10. Synthesis, Welfare, and Student Research Designs. The closing week integrates mechanism, evidence, welfare, and policy into a behavioral labor research agenda and asks how students can build credible frontier projects.

Course Map¶

• Foundational weeks: 1 to 4 build the field definition, taxonomy, and core worker-side mechanisms.

• Application-heavy weeks: 5 and 6 move the framework into workplaces, contracts, identity, and allocation.

• Empirical and methodological week: 7 centers on measurement, design, and identification.

• Equilibrium, policy, and frontier weeks: 8 to 10 focus on firm and market response, public policy, welfare, and student research design.

Research Orientation¶

The course is designed to read like a serious labor field special topic from the start. Its purpose is not to show that behavioral ideas can be attached to labor outcomes after the fact. Its purpose is to teach when behavioral departures generate distinctive labor predictions, distinctive empirical designs, and distinctive questions about policy delivery, equilibrium incidence, and welfare.