Alan Krueger's Research

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The following article appeared on the front page of the Wall St Journal on April 17, 1998:

The public, by 79% to 17%, favors raising the minimum hourly wage by $1 to $6.15. But Princeton economist Alan Krueger, whose research helped win a rise in 1996, is "less confident" another boost so soon " will have as benign consequences" on jobs as the last one seemed to have.

What research did Krueger use to "help win" a rise in the minimum wage in 1996? What did his results show?
The main theme of David Card and Alan Krueger's book, "Myth and Measurement: The New Economics of the Minimum Wage", is that the data do not support the view that minimum wages reduce employment. The most important chapter considers data for the fast food industry, where it is suggested that recent minimum wage increases may actually have increased employment, contrary to the standard theorem that labor demand curves slope down. A more reasonable view of the evidence, in this book and in many other studies going back to 1915, is that the employment effects of minimum wages are small, and difficult to detect in the noisy data available.
Much of the controversy surrounds a study conducted by David Card and Alan Krueger. In this study, Card and Krueger conducted a phone survey of 410 fast-food restaurants on both sides of the border between Pennsylvania and New Jersey prior to and after an increase in the state minimum wage in New Jersey. They found that employment increased by more in New Jersey in response to the higher minimum wage in this state.
Because of concerns about the Card and Krueger data, the Employment Policies Institute examined payroll records for 71 fast-food restaurants and ...