# employment

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Observations and Conjectures on the U.S. Employment Miracle
This paper has three goals. First, to place U.S. job growth in international perspective
by exploring cross-country differences in employment and population growth. This section finds
that the U.S has managed to absorb added workers -- especially female workers -- into
employment at a greater rate than most countries. The leading explanation for this phenomenon
is that the U.S. labor market has ﬂexible wages and employment practices, whereas European
labor markets are rigid. The second goal of the paper is to evaluate the labor market rigidities
hypothesis. Although greater wage ﬂexibility probably contributes to the U.S.'s comparative
success in creating jobs for its population, the slow growth in employment in many European
countries appears too uniform across skill groups to result from relative wage inﬂexibility alone.
Furthermore, a great deal of labor market adjustment seems to take place at a constant real wage
in the U.S. This leads to the third goal: To speculate on other explanations why the U.S. has
managed to successfully absorb so many new entrants to the labor market. We conjecture that
product market constraints contribute to the slow growth of employment in many countries.

Year of Publication
1997
Number
390
Date Published
08/1997
Publication Language
eng
Citation Key
8248
Pischke, J.-S. ., & Krueger, A. . (1997). Observations and Conjectures on the U.S. Employment Miracle. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01d217qp51c (Original work published August 1997)
Working Papers
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This paper summarizes the literature on the impact of employment
and training programs and concludes that they have been neither an
overwhelming success nor a complete failure in terms of their ability to
increase the long-term employment and earnings of disadvantaged workers.
Employment and earnings programs capacity to improve the lot of any
given participant, and the collective economic well—being of the disad-
vantaged, has been modest —— as has been the level of resources devoted
to these programs.
Two decades of non-experimental program evaluation in the
employment and training field have finally taught a less about which
there can be little disagreement: Convincing program evaluation is
going to require continued use of randomized trials. We wish to
emphasize that this is not simply a statement that randomization is a
preferable methodological approach regardless of the field of study.
Instead, we believe the evidence in the study of employment and training
programs overwhelmingly indicates that randomization is essential in
program evaluation in the employment and training field. The difficulty
seems to be that the earnings determination processes of today's workers
and the program selection methods of today's programs interact to make
it nearly impossible to produce reliable estimates of how workers ear-
nings would have behaved in the absence of a program. The evidence to
support this finding comes from both experimental and non—experimental
studies. The non-experimental studies indicate that minor changes in
methods, for which there is no empirical justification, produce large
swings in estimated program effects. The study of experimental findings
indicates that perfectly plausible non—experimental methods may lead to
dramatic errors in inferences about program effects.
This basic finding raises a fundamental question: What is the
proper reaction of policy makers? In our view the appropriate reaction
is for policymakers to begin the development of a credible research and
development effort using randomized clinical trials in a wide variety of
study areas.

Year of Publication
1985
Number
194
Date Published
07/1985
Publication Language
eng
Citation Key
In Sheldon H. Danziger (ed.) Fighting Poverty: What Works and What Doesn't, (Cambridge, MA and London:Harvard University Press, 1986)
Ashenfelter, O. ., & Bassi, L. . (1985). The Effect of Direct Job Creation and Training Programs on Low-Skilled Workers. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01mg74qm11x (Original work published July 1985)
Working Papers
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Despite a record of sustained growth in employment in the United States,
there is longstanding concern that the new jobs are of poor quality, implying that the
quality of the stock of jobs in the economy is deteriorating. In fact, it is difficult to deﬁne
a new job, much less identify such jobs and evaluate their quality. In this study, I deﬁne new
jobs operationally as worker-firm matches that have begun within the last year (i.e., tenure
less than one year), and I investigate the extent to which the quality of new (low tenure)
jobs relative to old (higher tenure) jobs has changed over the period from 1979-1996. I
consider three dimensions of quality: real wages, the rate of part-time employment, and
the rate of coverage by employer-provided health insurance. The empirical analysis relies
on data from eight mobility and beneﬁt supplements to the Current Population Survey
over the period studied. The results are clearcut. Real hourly wages on new jobs have
deteriorated slightly relative to wages on older jobs, but the general patterns of the wage
distribution on new jobs have changed in ways similar to the overall wage distribution (a
large increase in the return to education driven by a large decline in wages for less-skilled
workers). There is no evidence of an increase in the rate of part-time employment on
either new jobs or old jobs so that the quality of new jobs has not changed absolutely
or relative to the quality of older jobs in this dimension. The quality of new jobs has
deteriorated substantially for some workers in the provision of employer-provided health
insurance. Less-educated workers have become substantially less likely to be covered by
or offered health insurance by their employer, and the decline is particularly large on new
jobs. There has been a smaller decline in employer-provided health insurance coverage for
more-educated workers on both old and new jobs, but the decline is no larger on new jobs
than on old jobs. On balance, there has been a decline in the quality of jobs for less-skilled
workers, as measured by the availability of a key fringe beneﬁt, that is especially severe
for new jobs and that reinforces the well-known deterioration of the labor market for
less-skilled workers more generally. There has been relatively little change in the quality
of jobs available to more highly-skilled workers, either on new or on old jobs.

Year of Publication
1997
Number
385
Date Published
07/1997
Publication Language
eng
Citation Key
8309
Farber, H. . (1997). Job Creation in the United States: Good Jobs or Bad?. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01hh63sv90n (Original work published July 1997)
Working Papers
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This paper uses tight parametric assumptions to model individual unemployment
histories in a structural form. Starting from a simple search model it is shown
that individual spells are distributed exponentially with different hazard rates
for different individuals. In contrast to the usual reduced form approach the
choice of the reservation wage is directly incorporated into the analysis. In
effect, a log—linear simultaneous equations system is derived that explains both
reservation wages and elapsed spell durations of currently unemployed individuals
in terms of exogeneous variables. Moreover, it is demonstrated that apart from
constant terms an identical structural form should be valid for accepted wages
and completed spell durations for individuals who are re-employed at the time of
the survey.
The empirical part of the paper uses data from the Federal Republic of Germany
to estimate the parameters of this structural form both for a subsample of
unemployed and a subsample of re-employed individuals. Evidence on the
performance of structural search models was previously provided only for
currently unemployed individuals by the studies by Kiefer/Neumann (1979),
Lancaster (1985), and Jones (1988). This study is therefore the first to provide
evidence for re-employed individuals. Furthermore it is the first of its kind to
investigate German data. In this paper the main emphasis is given to the
robustness of the estimation results across subsamples, not to the formulation
of formal tests for the validity of cross—subsample restrictions. The resulting
evidence is mainly favorable, and the paper concludes with an extensive
discussion of merits and remaining deficiencies of the proposed model.

Year of Publication
1990
Number
266
Date Published
06/1990
Publication Language
eng
Citation Key
8342
Schmidt, C. . (1990). Testing the Stationary Search Model. Retrieved from http://arks.princeton.edu/ark:/88435/dsp017w62f8227 (Original work published June 1990)
Working Papers
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This paper re-examines the effect of the 1992 New Jersey minimum wage increase on
employment in the fast-food industry. We begin by analyzing employment trends using a
comprehensive new data set derived from the Bureau of Labor Statistics's (BLS's) ES-202 data
file. Both a longitudinal sample and a repeated-cross-section sample drawn from these data
indicate similar or slightly faster employment growth in New Jersey than in eastern Pennsylvania
after the rise in New Jersey's minimum wage, consistent with the main findings of our earlier
survey. We also use the ES-202 data to measure the effects of the 1996 increase in the federal
minimum wage, which raised the minimum wage in Pennsylvania but not in New Jersey. We
find no indication of relative employment losses in Pennsylvania. In light of these findings, we
re-examine employment trends in the sample of fast-food restaurants assembled by the
Employment Policies Institute (EPI) and David Neumark and William Wascher. The differences
between this sample and both the BLS data and our earlier sample are attributable to a small set
of restaurants owned by a single franchisee who provided the original Pennsylvania data for a
1995 EPI study. We also find that employment trends in the EPI/Neumark-Wascher sample are
strikingly different for firms that reported their data on a weekly, biweekly or monthly basis,
possibly because of seasonal factors. Controlling for the systematic effects of the varying
reporting intervals, the combined EPI/Neumark-Wascher sample shows no difference in hours
growth between New Jersey and Pennsylvania.

Year of Publication
1997
Number
393
Date Published
12/1997
Publication Language
eng
Citation Key
American Economic Review, 2000
Krueger, A. ., & Card, D. . (1997). A Reanalysis of the Effect of the New Jersey Minimum Wage Increase on the Fast-Food Industry with Representative Payroll Data. Retrieved from http://arks.princeton.edu/ark:/88435/dsp016w924b826 (Original work published December 1997)
Working Papers
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This paper presents a survey of recent microeconometric studies of
the labor market, focusing on research that emphasizes the possible
failure of measured wage rates to separate individual supply and demand
decisions. On both the demand and supply sides of the labor market
there is evidence that forces from the other side of the market
influence employment outcomes through some mechanism other than the
wage. On the supply side, this evidence takes the form of correlations
between individual labor supply outcomes and market—level measures of
employment demand in the individual's local labor market. On the demand
side, it takes the form of correlations between firms’ employment decisions and measures of their employees‘ outside opportunities. Both sets
of findings are inconsistent with simple supply and demand models, and
suggest the need for alternative models of the labor market, which
permit an uncoupling of short-run employment decisions from wage rates.

Year of Publication
1987
Number
228
Date Published
11/1987
Publication Language
eng
Citation Key
8354
Card, D. . (1987). Supply and Demand in the Labor Market. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01pz50gw11t (Original work published November 1987)
Working Papers
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A Case Study of the Fast Food Industry in New Jersey and Pennsylvania

Year of Publication
1995
Date Published
2011-12-14
Publication Language
eng
Citation Key
7802
Krueger, A. . (1995). Minimum Wages and Employment: Tseries. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01zg64tk94k
Data sets
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This paper presents an analysis of the impact of a workplace education program that
was administered by a community college at two companies. One of the companies we study
is in the manufacturing sector and the other is in the service sector. The analysis relies on
longitudinal administrative data and cross-sectional survey data. We examine a broad range
of outcome variables, including workers’ earnings, performance awards, job attendance, and
subjective performance measures. Our main finding is that the program had a small, positive
impact on earnings at the manufacturing company, but an insigniﬁcant impact at the service
company. We also find that the training program had a positive association with the
incidence of job bids, upgrades, performance awards, and job attendance. At the
manufacturing company, occupational courses, such as blue print reading, had the largest
impact.

Year of Publication
1994
Number
329
Date Published
05/1994
Publication Language
eng
Citation Key
Journal of Labor Economics, Vol. 16, No. 1, 1998
Krueger, A. ., & Rouse, C. . (1994). New Evidence on Workplace Education. Retrieved from http://arks.princeton.edu/ark:/88435/dsp0112579s25n (Original work published May 1994)
Working Papers
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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
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The US unemployment insurance system is financed by an experience-rated
payroll tax. The system imposes a layoff or firing cost on employers, leading
them to fire fewer workers in a downturn and hire fewer workers in an upturn.
Increases in the degree of experience rating are therefore predicted to reduce
the temporary layoff unemployment rate in a recession, and to lower employment
at the peak of the business cycle.
We combine Current Population Survey data for l979-1987 with a newly
assembled database of experience rating factors for individual states and
industries to measure the effects of imperfect experience rating on temporary
layoff unemployment rates over the cycle. We find a strong negative
correlation between the degree of experience rating and the rate of layoff
unemployment in recessionary years, but smaller and unsystematic correlations
in expansionary years. We also find that cyclical employment fluctuations are
dampened in states and industries with a greater degree of experience rating.

Year of Publication
1990
Number
288
Date Published
07/1990
Publication Language
eng
Citation Key
Journal of Public Economics, 53, February 1994
Levine, P. ., & Card, D. . (1990). Unemployment Insurance Taxes and the Cyclical Properties of Employment and Unemployment. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01xs55mc064 (Original work published July 1990)
Working Papers