David Card

First name
David
Last name
Card
Author
Abstract

This paper presents a survey and interpretation of recent research on
the return to education. The empirical findings in a series of current
papers suggest that the causal effect of education on earnings is
understated by standard estimation methods. Using a simple model of
optimal schooling developed by Gary Becker (1967), I derive an explicit
formula for the conventional estimate of the return to schooling and for
alternative instrumental variables and fixed-effects estimators. The
analysis suggests that instrumental variables estimates based on
"interventions" that affect the schooling choices of children from
relatively disadvantaged family backgrounds will tend to exceed the
corresponding OLS estimates.

Year of Publication
1994
Number
331
Date Published
05/1994
Publication Language
eng
Citation Key
In Solomon Polachek (ed.), Research in Labor Economics, Vol. 14, Greenwich, CT: JAI Press 1995, pp. 23-48
Card, D. (1994). Earnings, Schooling, and Ability Revisited. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01rb68xb85z (Original work published May 1994)
Working Papers
Abstract

We re-examine the evidence presented by Neumark and Wascher (1992) on
the employment effect of the minimum wage. We find three critical flaws in
their analysis. First, the school enrollment variable that plays a pivotal
role in their specifications is derived on the false assumption that
teenagers either work or attend school. Measurement error biases
contaminate all the empirical estimates that use this enrollment variable.
Second, Neumark and Wascher measure the effect of the minimum wage by a
coverage-weighted relative minimum wage index. This variable is negatively
correlated with average teenage wages. Taken literally, their results show
that a rise in the coverage-weighted relative minimum wage lowers teenage
wages. Examining the direct effects of state-specific minimum wages, we
find that increases in state minimum wages raise average teenage wages but
have essentially no employment effects.
Finally, a careful analysis of Neumark and Wascher's data shows that
subminimum wage provisions are rarely used. This casts doubt on their
claim that subminimum provisions blunt any disemployment effect of the
minimum wage.
Neumark and Wascher contend that other minimum wage studies are biased
by failing to control for school enrollment, and by failing to consider the
lagged effects of minimum wages. We re-analyze the experiences of
individual states following the April 1990 increase in the Federal minimum
wage, allowing for a full year lag in the effect of the law and controlling
for changes in (properly measured) enrollment rates. Contrary to their
claims, allowing for lagged effects and controlling for enrollment status
actually strengthens the conclusion that the 1990 increase in the Federal
minimum had no adverse employment effect.

Year of Publication
1993
Number
316
Date Published
04/1993
Publication Language
eng
Citation Key
Industrial and Labor Relations Review, Vol. 47, No. 3, April, 1994
Krueger, A., Card, D., & Katz, L. (1993). Comment on David Neumark and William Wascher, "Employment Effects of Minimum and Subminimum Wages: Panel Data on State Minimum Wage Laws". Retrieved from http://arks.princeton.edu/ark:/88435/dsp018c97kq41c (Original work published April 1993)
Working Papers
Abstract

We use information on retirement flows over the 1986-96 period for older faculty at a
large sample of four year colleges and universities to measure the effect of the elimination of
mandatory retirement.
Comparisons of retirement rates before and after 1994, when most institutions were
forced to stop mandatory retirement, suggest that the abolition of compulsory retirement led to a
dramatic drop in retirement rates at ages 70 and 7 1. Comparisons of retirement rates in the early
1990s between schools that were still enforcing mandatory retirement, and those that were forced
to stop by state laws, lead to the same conclusion. In the era of mandatory retirement, fewer than
10 percent of 70-year-old faculty were still teaching two years later. After the elimination of
mandatory retirement this fraction has risen to 50 percent. Our findings suggest that most U.S.
colleges and universities will experience a significant rise in the fraction of older faculty in the
coming years.

Year of Publication
2000
Number
448
Date Published
10/2000
Publication Language
eng
Citation Key
The American Economic Review, Vol. 92, No. 4, September, 2002
Ashenfelter, O., & Card, D. (2000). How Did the Elimination of Mandatory Retirement Affect Faculty Retirement?. Retrieved from http://arks.princeton.edu/ark:/88435/dsp013484zg90j (Original work published October 2000)
Working Papers
Abstract

In this paper we study the effects of school finance reforms on the distribution of school spending across richer
and poorer districts, and the consequences of spending equalization for the distribution of SAT scores across
children from different family backgrounds. We use school district data from the 1977 and 1992 Censuses of
Governments to measure the correlation between state funding per pupil and median family income in each
district. We find that states where the school finance system was declared unconstitutional in the 1980s increased
the relative funding of low-income districts. Increases in state funds available to poorer districts led to
comparable or only slightly smaller increases in the relative spending of these districts, implying significant
equalization of expenditures per pupil across richer and poorer districts. Using micro samples of SAT scores
from this same period, we study the effect of changes in spending inequality within states on the gaps in test
scores for children from different family backgrounds. We develop a two-sample procedure to estimate the
fraction of students from each background group who write the test, and use these fractions to adjust for
selectivity biases in observed test score outcomes. We find some evidence that the equalization of spending
across districts leads to a narrowing of test score outcomes across family background groups.

Year of Publication
1997
Number
387
Date Published
07/1997
Publication Language
eng
Citation Key
8327
Payne, A., & Card, D. (1997). School Finance Reform, the Distribution of School Spending, and the Distribution of SAT Scores. Retrieved from http://arks.princeton.edu/ark:/88435/dsp016395w7105 (Original work published July 1997)
Working Papers
Abstract

A growing fraction of U.S. workers face a dual system of medical insurance, with
generous coverage through the Workers’ Compensation system for work-related injuries, but
limited or non-existent coverage for off-the-job illnesses or injuries. Uninsured and under-
insured workers have an economic incentive to report off-the-job injuries as work accidents.
Many analysts have interpreted the high rate of Monday injuries -- especially for hard-to-detect
injuries like back sprains -- as evidence of this incentive. We combine administrative data on
workplace injury claims with Current Population Survey data on medical insurance coverage to
compute the fraction of Monday injury claims for workers who are more and less likely to have
medical insurance. We find that workers with lower medical coverage rates are no more likely
to report a Monday injury than other workers.

Year of Publication
1994
Number
327
Date Published
04/1994
Publication Language
eng
Citation Key
Industrial and Labor Relations Review, Vol. 49 No. 4 (July 1996)
Riddell, C., & Card, D. (1994). Is Workers’ Compensation Covering Uninsured Medical Costs? Evidence from the ’Monday Effect’. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01mk61rg93q (Original work published April 1994)
Working Papers
Abstract

On April 1, 1992 New Jersey's minimum wage rose from $4.25 to $5.05 per hour. To evaluate the impact of the new law we surveyed over 400 fast food restaurants in New Jersey and Pennsylvania before and after the rise in the minimum. Comparisons of the changes in wages, employment, and prices at stores in New Jersey relative to stores in Pennsylvania (where the minimum remained constant at $4.25 per hour) provide simple robust estimates of the effect of the increased minimum wage. Our empirical findings challenge the conventional notion that a rise in the minimum causes employment to decline. Relative to stores in Pennsylvania, fast food restaurants in New Jersey increased employment by 2.5 employees per store. We also compare employment changes at stores in New Jersey that were initially paying $5.00 per hour or more (and were therefore largely unaffected by the new law) to the employment changes at lower-wage stores, where the new law raised wages by 10-15 percent. Stores that were unaffected by the minimum wage had the same employment growth as stores in Pennsylvania, while stores that had to increase their wages increased their employment. Finally, we evaluate theoretical models that might explain these results.

Year of Publication
1993
Number
315
Date Published
03/1993
Publication Language
eng
Citation Key
American Economic Review, Vol. 84, No. 4, September, 1994
Krueger, A., & Card, D. (1993). Minimum Wages and Employment: A Case Study of the Fast Food Industry in New Jersey and Pennsylvania. Retrieved from http://arks.princeton.edu/ark:/88435/dsp017d278t020 (Original work published March 1993)
Working Papers
Author
Abstract

It is not widely acknowledged that the process of wage
determination in long term labor contracts may be critical
to the determination and persistence of inflation and
unemployment in North America. This paper uses Canadian
contract data to analyse one important feature of long term
contracts with cost of living indexation: the
responsiveness of contracted vage rates to changes in prices
within the contract period. Surprisingly, there is wide
variation in this responsiveness across industries and
across contracts. In about 15 percent of contracts average
wage earners are over-indexed to inflation, receiving cost
of living wage adjustments that increase their wages faster
than the rate of inflation. On the other hand, in another 30
percent of contracts average wage earners receive cost of
living increases that respond to each percentage increase in
prices with a .7 percent or smaller increase in wages. Much
of this variation is attributable to systematic industry
effects, suggesting that industry characteristics may have a
major role in determining the degree or indexation.

Year of Publication
1981
Number
145
Date Published
08/1981
Publication Language
eng
Citation Key
8181
Card, D. (1981). Wage Indexation in Labor Contracts and the Measurement of Escalation Elasticities. Retrieved from http://arks.princeton.edu/ark:/88435/dsp012514nk50h (Original work published August 1981)
Working Papers
Abstract

More immigrants entered the United States during the l980s than
in any comparable period since the 1920s. Although at a national
level the inflow rates were relatively modest, most of the newly
arriving immigrants settled in only a handful of cities. In this
paper, we study the effects of immigration during the 1980s on the
evolution of wages within a sample of 24 major cities. We
concentrate on changes in wages for relatively low-paid workers,
and on changes in the gap between highly-paid and low-paid
workers. Our analysis reveals significant differences across
cities in the relative growth rates of wages for low-paid and
highly-paid workers. However, the relative growth rates of wages
at the low end of the earnings distribution bear little or no
relation to the relative size of immigrant inflows to different
cities.

Year of Publication
1991
Number
281
Date Published
02/1991
Publication Language
eng
Citation Key
American Economic Review, 81, May, 1991
Butcher, K., & Card, D. (1991). Immigration and Wages: Evidence From the 1980s. Retrieved from http://arks.princeton.edu/ark:/88435/dsp012b88qc18j (Original work published February 1991)
Working Papers
Abstract

In a classic paper, Schelling (1971) showed that extreme segregation can arise from
social interactions in preferences: once the minority share in a neighborhood exceeds a
"tipping point", all the whites leave. We use regression discontinuity methods and
Census tract data from the past four decades to test for the presence of discrete nonlinearities
in the dynamics of neighborhood racial composition. White mobility patterns
in most cities exhibit tipping-like behavior, with a range of tipping points centered
around a 13% minority share. These patterns are very pronounced during the 1970s
and 1980s, and diminish but do not disappear in the 1990s. We find similar dynamic
patterns in neighborhoods and in schools. A variety of specification checks rule out the
possibility that the discontinuity in the initial minority share is driven by income
stratification or other factors, and underscore the importance of white preferences over
neighbors ' race and ethnicity in the dynamic process of segregation. Finally, we relate
the location of the estimated tipping points in different cities to measures of the racial
attitudes of whites, and find that cities with more racially tolerant whites have higher
tipping points.

Year of Publication
2006
Number
515
Date Published
10/2006
Publication Language
eng
Citation Key
7875
Card, D., Mas, A., & Rothstein, J. (2006). Tipping and the Dynamics of Segregation in Neighborhoods and Schools. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01kk91fk532 (Original work published October 2006)
Working Papers
Abstract

According to standard economic models, adverse demand shocks will lead to bigger
employment losses if institutional factors like minimum wages and trade unions prevent real
wages from falling. Some economists have argued that this insight explains the contrast
between the United States, where real wages fell over the 1980s and aggregate employment
expanded vigorously, and Europe, where real wages held steady and employment was
stagnant. We test the hypothesis by comparing recent changes in wages and employment
rates for different age and education groups in the United States, Canada, and France. We
argue that the same forces that led to falling real wages for less-skilled workers in the U.S.
also affected Canada and France. Consistent with the view that labor market institutions in
Canada and France reduce wage flexibility, we find that the relative wages of less-skilled
workers fell more slowly in Canada than the U.S. during the 1980s, and did not fall at all in
France. Contrary to expectations, however, we find little evidence that wage inflexibilities
generated divergent patterns of relative employment growth across the three countries.

Year of Publication
1995
Number
355
Date Published
12/1995
Publication Language
eng
Citation Key
NBER Working Paper #5487, March 1996, Canadian Journal of Economics, Vol. 32, No. 4, August 1999
Kramarz, F., Card, D., & Lemieux, T. (1995). Changes in the Relative Structure of Wages and Employment: A Comparison of the United States, Canada, and France. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01qf85nb29s (Original work published December 1995)
Working Papers