Not available in 2015/16
MG4B2      Half Unit
Personnel Economics

This information is for the 2015/16 session.

Teacher responsible

Dr Yona Rubinstein NAB5.31


This course is available on the MSc in Human Resources and Organisations (Human Resource Management/CIPD), MSc in Human Resources and Organisations (International Employment Relations and Human Resource Management), MSc in Human Resources and Organisations (Organisational Behaviour), MSc in International Management, MSc in Management, MSc in Management (CEMS MIM) and MSc in Management and Strategy. This course is available with permission as an outside option to students on other programmes where regulations permit.


Students will need to have some understanding of microeconomics and knowledge of basic statistical methods would be an advantage

Course content

Personnel economics applies economic principles to human resources management issues such as recruitment, compensation, promotions, performance evaluation, selection, and training. The course provides a rigorous theoretical framework and the statistical tools needed to analyse human resources policies under varying institutional and competitive environments. It highlights the importance of information and incentives in the modern economy. Issues covered include should pay vary across workers within firms? How are pay and promotions structured across jobs to induce optimal effort from employees? Why do firms use teams and how are they used most effectively? Does CEO pay reflect competitive markets and efficient contracting? How important is discrimination What makes an entrepreneur? How should human resource management practices be combined within firms?


30 hours of seminars in the LT. 3 hours of seminars in the ST.

Formative coursework

Students will be required to undertake the analysis of two human resource management problems which will be marked and handed back with feedback.

Indicative reading


Personnel Economics in Practice, 2nd Edition, by Edward P. Lazear and Michael Gibbs, 2009.


Personnel Economics for Managers, by Edward P. Lazear, 1998.


Autor, David, Frank Levy, and Richard Murnane, (2003). The Skill Content of Recent Technological Change: An Empirical Exploration. Quarterly Journal of Economics, pp 1279-1333.

Bandiera, Iwan Barankay and Imran Rasul, (2009). Social Connections and Incentives in the Workplace: Evidence from Personnel Data,Econometrica, 4(07), pp 1047-1094.

Bertrand Marianne, Claudia Goldin and Lawrence Katz , (2009) Dynamics of the Gender Gap for Young Professionals in the Financial and Corporate Sectors, NBER WP 14681.

Bertrand, Marianne and Sendhil Mullainathan, (2001). Are CEOS Rewarded for Luck? The Ones without Principals Are, Quarterly Journal of Economics, pp 901-932.

Evans, D and L Leighton, (1989). Some Empirical Aspects of Entrepreneurship, American Economic Review, Vol. 79, pp. 519-535.

Gabaix, Xavier and Augustin Landier, (2008). Why has CEO Pay Increased So Much? Quarterly Journal of Economics, pp 49-100.

Gibbons, R and L. Katz, (1991). Layoffs and lemons, Journal of Labor Economics, vol. 8, pp 351-80.

Jensen, M and K J Murphy, (1990). Performance Pay and Top-Management Incentives, Journal of Political Economy, pp 225-64.

Lazear, Edward, (2000). Performance Pay and Productivity, American Economic Review, 90 (5), pp 1346-1361.

Lazear, Edward, (2005). Entrepreneurship, Journal of Labor Economics, Vol. 23, No. 4, pp. 649-680.

McLaughlin, K. J., (1991). "A Theory of Quits and Layoffs with Efficient Turnover," Journal of Political Economy 99(1): 1-29.

Mulligan Casey, B. and Yona Rubinstein, (2008). Selection, Investment, and Women's Relative Wages, Quarterly Journal of Economics, V123, 1061-1110.

Murphy K J. (1999). Executive Compensation, in Ashenfelter & Card, Handbook of Labor Economics, Vol. 3B, North Holland.

Prendergast, Canice (1999). The provision of incentives in firms, Journal of Economic Literature, pp. 7-63.

Raff Daniel and Larry Summers, (1985). Did Henry Ford Pay Efficiency Wages? Journal of Labor Economics, Vol. 5, No. 4, S57-86.

Rubinstein Yona and Yoram Weiss, (2007). Post School Earnings: Search versus Human Capital, Chapter one in the Handbook of the Economics of Education, Volume 1, eds. Eric A. Hanushek and Finis Welch, Elsevier B.V.


Exam (100%, duration: 2 hours) in the main exam period.

Key facts

Department: Management

Total students 2014/15: Unavailable

Average class size 2014/15: Unavailable

Controlled access 2014/15: No

Value: Half Unit

Guidelines for interpreting course guide information

Personal development skills

  • Problem solving
  • Commercial awareness