Minimum Wage
The Card-Kreuger Study
- "The Effect of New Jersey's Minimum Wage Increase on Fast-Food Employment: A Re-Evaluation Using Payroll Records," David Neumark & William Wascher. Card and Kreuger's employment data was bad. They got it by phoning up restaurants---or having research assistants do it. N-W got administrative payroll data from the restaurants.
- [https://www.jstor.org/stable/2524979 "Comment on David Neumark and William Wascher, "Employment Effects of Minimum and Subminimum Wages: Panel Data on State Minimum Wage Laws,"
] David Card, Lawrence F. Katz and Alan B. Krueger
ILR Review Vol. 47, No. 3 (Apr., 1994), pp. 487-497.
- "Subminimum Wages: Reply to Card, Katz and Krueger, David Neumark & William Wascher.
The Card-Krueger data were elicited from a survey that asked managers or assistant managers “How many full-time and part-time workers are employed in your restaurant, excluding managers and assistant managers?” This question is highly ambiguous, as it could refer to the current shift, the day, or perhaps the payroll period, and the respondents’ interpretation of it could differ in the observations covering the periods before and after the minimum wage increase. In contrast, the payroll data referred unambiguously to the payroll period used by the restaurant. Reflecting this difference, the data collected by Card and Krueger had much greater variability across the two observations than did the payroll data, with changes that were sometimes implausible...
.
In contrast both to their original study and to our replication, their reanalysis generally finds small and statistically insignificant effects of the increase in New Jersey’s minimum wage on employment, and they conclude that “the increase in New Jersey’s minimum wage probably had no effect on total employment in New Jersey’s fast-food industry, and possibly had a small positive effect”.
