A Reexamination of Card and Krueger's State-Level Study of the Minimum Wage

Card and Krueger's (1995) difference-in-difference study of the 1990-1991 federal minimum wage hikes compared states by the proportion of workers directly affected by the minimum wage. They found "no evidence that the increase in the minimum wage significantly lowered teenage employment rates more in highly affected states" and they concluded the minimum wage did not reduce employment. Their paper was highly influential and convinced many that the minimum wage did not reduce employment. However, when I apply their model to the 1996-1997 federal minimum wage hike, I find that increases in the minimum wage significantly lowered teenage employment rates more in highly affected states. Using Card and Krueger's interpretation, this implies the minimum wage did reduce teenage employment.     

MINIMUM WAGES AND TIPPED SERVERS

Tips allow restaurants to pay servers lower wages. As more servers are hired, each serves fewer meals and earns less in tips. As a result, restaurants must pay a higher wage. This gives them monopsony power over wages. Over some range, a higher minimum wage should increase employment. Empirically, we found the full "reverse C" monopsony pattern of employment for restaurants, with employment first going up and then down as the minimum wage is increased.     

Banks,Insurance Companies,and Discrimination1

This article examines some of the reasons why banks and insurance companies have been accused of discrimination, and shows that this is by and large a false accusation. Economic analysis demonstrates that racial discrimination is not a profit‐maximizing strategy. Actually, unwise public policies are actually precluding many consumers from the market.     

EFFECTS OF INTERVIEWER GENDER, INTERVIEWER CHOICE, AND ITEM WORDING ON RESPONSES TO QUESTIONS CONCERNING SEXUAL BEHAVIOR

We examined factors influencing responses to questions on sexualbehavior among adult respondents 18–49 years old (unweightedN = 2,030) obtained through a random-digit dialing survey. Basedon self-disclosure and perceived control the ory, we hypothesizedthat giving people a choice in selecting the gender of theirinterviewer rather than being assigned an inter viewer, andusing questions that are "supportive" of what may be perceivedof as nonnormative behavior (enhanced items), would increasedata quality relative to, respectively, matched-or opposite-genderinterviewer conditions and standard worded items. The enhanceditems facilitated responding to a number of sensitive topics.However, the effects of item wording on item response are oftenmediated by interviewer conditions. The "choice" results suggestthat giving respondents greater control decreases question threat.However, the overall findings argue for matching respondentsand interviewers on gender over opposite-gender interviewersor allowing respondents to select their interviewer's gender.Wording and interviewer manipulations reduced the discrepanciesbetween men's and women's self-reports of sexual behavior, butthey did not eliminate them, and in some cases they had no effect.The present findings suggest that males tend to be influencedby variations in item wording, interviewer gender, and respondentcontrol across a somewhat wider range of sexual topics. In general,the findings recommend matching respondents and interviewerson gender and the use of more supportive wording in sexual behaviorquestions. However, for assessment of some topics (e.g., sexualviolence) in particular segments of the population (e.g., men),other procedures, such as increasing respondent control, maybe a better choice. Overall, the data support the view thatin terms of preferred procedures, not all sexual topics arecreated equal.     

THE EFFECT OF MINIMUM WAGES IN THE PRESENCE OF FRINGE BENEFITS: AN EXPANDED MODEL

Firms may react to a minimum wage hike by reducing their expenditures on fringe benefits. This possibility is incorporated into an expanded model of minimum wages. A set of predictions that differentiate this expanded model from current minimum wage models is derived and tested. The expanded model is shown to better predict the effect of minimum wages on labor force participation, quit rates, and prices than previous models. An interesting result of the expanded model is that a covered worker may be worse off due to a minimum wage hike even if he retains his job.