David Card; Alan B. Krueger, The American Economic Review, Vol. 84, No. 4., December 2000

Replication and reanalysis are important endeavors in economics, especially when new findings run counter to conventional wisdom. In their Comment on our 1994 American Economic Review article, David Neumark and William Wascher (2000) challenge our conclusion that the April 1992 increase in the New Jersey minimum wage led to no loss of employment in the fast-food industry. Using data drawn from payroll records for a set of restaurants initially assembled by Richard Berman of the Employment Policies Institute (EPI) and later supplemented by their own data collection efforts, Neumark and Wascher (hereafter, NW) conclude that “… the New Jersey minimum-wage increase led to a relative decline in fast-food employment in New Jersey” compared to Pennsylvania. They attribute the discrepancies between their findings and ours to problems in our fast-food restaurant data set. Specifically, they argue that our use of employment data derived from telephone surveys, rather than from payroll records, led us to draw faulty inferences about the effect of the New Jersey minimum wage.

Download Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania: Reply