Overview
Alan B. Krueger (1960–2019) was the Bendheim Professor of Economics and Public Affairs at Princeton University and a former Chairman of the Council of Economic Advisers (2011–2013). He was one of the leading empirical labor economists of his generation, known for combining natural experiment methods with careful institutional knowledge to identify causal effects of labor market policies. His collaborations with Joshua Angrist on compulsory schooling and military service, and with David Card on minimum wages, became landmark demonstrations of the natural experiment approach in economics.
Key Contributions / Features
- Quarter of birth as IV (Angrist and Krueger 1991): Used quarter of birth as an instrument for educational attainment in earnings equations. Students born late in the year enter school at an older age and are subject to compulsory attendance laws for less time, generating variation in schooling that is plausibly exogenous. The exclusion restriction — that birth quarter affects earnings only through schooling — was extensively documented. A canonical example of IV with a natural experiment instrument. See Returns to Schooling.
- World War II veterans earnings premium (Angrist and Krueger 1994): Used variation in World War II draft eligibility by birth cohort as an instrument for veteran status to identify the earnings premium to military service, addressing the selection problem in raw veteran–nonveteran comparisons.
- Minimum wage and employment (Card and Krueger 1994): Studied the employment effects of the 1992 New Jersey minimum wage increase using Pennsylvania fast-food restaurants as a DiD control group. Found no negative employment effect — a result that challenged the standard competitive labor market prediction and sparked extensive follow-up research. A central example in Meyer (1995)'s discussion of Difference-in-Differences designs.
- Minimum wage federal extension (Katz and Krueger 1992): Examined the effect of the 1991 federal minimum wage increase on fast-food employment, also finding no significant employment reduction.
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