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Angrist’s Critique of Card and Krueger

Summary:
As in the original Card and Krueger survey, the administrative data show a slight decline in the employment from February to November 1992 in Pennsylvania, and little change in New Jersey over the same time period. However, the data also reveals substantial year to year employment variations in other period. In particular, while employment levels in New Jersey and Pennsylvania were similar at the end of 1991, employment in Pennsylvania fell relative to employment in New Jersey over the next three years (especially in the 14-county group), mostly before the 1996 increase in the federal minimum wage.So Pennsylvania may not provide a very good measure of counterfactual employment rates in New Jersey in the absence of a minimum wage change. This is from Joshua Angrist

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Angrist’s Critique of Card and Krueger

As in the original Card and Krueger survey, the administrative data show a slight decline in the employment from February to November 1992 in Pennsylvania, and little change in New Jersey over the same time period. However, the data also reveals substantial year to year employment variations in other period. In particular, while employment levels in New Jersey and Pennsylvania were similar at the end of 1991, employment in Pennsylvania fell relative to employment in New Jersey over the next three years (especially in the 14-county group), mostly before the 1996 increase in the federal minimum wage.So Pennsylvania may not provide a very good measure of counterfactual employment rates in New Jersey in the absence of a minimum wage change.

This is from Joshua Angrist and Jorn Pischke, Mostly Harmless Econometrics, p. 231.

Hat tip to economist D. W. MacKenzie, who gives a pared down version of this quote in “Economics Nobel Prize winners disagree, yet again,” October 15, 2021.

His title, of course, refers to Angrist and Card, who, last Monday, were announced as 2 of the 3 winners of the 2021 Nobel Prize in economics.

David Henderson
David R. Henderson (born November 21, 1950) is a Canadian-born American economist and author who moved to the United States in 1972 and became a U.S. citizen in 1986, serving on President Ronald Reagan's Council of Economic Advisers from 1982 to 1984.[1] A research fellow at Stanford University's Hoover Institution[2] since 1990, he took a teaching position with the Naval Postgraduate School in Monterey, California in 1984, and is now a full professor of economics.[3]

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