Best Selling Books by Alan B. Krueger

This paper tries to reconcile evidence from the microeconometric and empirical macro growth literatures on the effect of schooling on income and GDP growth. Much microeconometric evidence suggest that education is an important causal determinant of income for individuals within countries. At a national level, however, recent studies have found that increases in educational attainment are unrelated to economic growth. This finding appears to be a spurious result of the extremely high rate of measurement error in first-differenced cross-country education data. After accounting for measurement error, the effect of changes in educational attainment on income growth in cross-country data is at least as great as microeconometric estimates of the rate of return to years of schooling. Another finding of the macro growth literature - that economic growth depends positively on the initial stock of human capital - is shown to result from imposing linearity and constant-coefficient assumptions on the estimates. These restrictions are often rejected by the data, and once either assumption is relaxed the initial level of education has little effect on economic growth for the average country

This paper provides evidence on the behavior of reservation wages over the spell of unemployment using high-frequency longitudinal data. Using data from our survey of unemployed workers in New Jersey, where workers were interviewed each week for up to 24 weeks, we find that self-reported reservation wages decline at a modest rate over the spell of unemployment, with point estimates ranging from 0.05 to 0.14 percent per week of unemployment. The decline in reservation wages is driven primarily by older individuals and those with personal savings at the start of the survey. The longitudinal nature of the data also allows us to test the relationship between job acceptance and the reservation wage and offered wage, where the reservation wage is measured from a previous interview to avoid bias due to cognitive dissonance. Job offers are more likely to be accepted if the offered wage exceeds the reservation wage, and the reservation wage has more predictive power in this regard than the pre-displacement wage, suggesting the reservation wage contains useful information about workers' future decisions. In addition, there is a discrete rise in job acceptance when the offered wage exceeds the reservation wage. In comparison to a calibrated job search model, the reservation wage starts out too high and declines too slowly, on average, suggesting that many workers persistently misjudge their prospects or anchor their reservation wage on their previous wage.

Abstract: Uber, the ride-sharing company launched in 2010, has grown at an exponential rate. This paper provides the first comprehensive analysis of the labor market for Uber's driver-partners, based on both survey and administrative data. Drivers who partner with Uber appear to be attracted to the platform largely because of the flexibility it offers, the level of compensation, and the fact that earnings per hour do not vary much with the number of hours worked. Uber's driver-partners are more similar in terms of their age and education to the general workforce than to taxi drivers and chauffeurs. Most of Uber's driver-partners had full- or part-time employment prior to joining Uber, and many continued in those positions after starting to drive with the Uber platform, which makes the flexibility to set their own hours all the more valuable. Uber's driver-partners also often cited the desire to smooth fluctuations in their income as a reason for partnering with Uber

Using data assembled by the Global Environmental Monitoring System we examine the reduced-form relationship between various environmental indicators and the level of a country's per capita income. Our study covers four types of indicators: concentrations of urban air pollution; measures of the state of the oxygen regime in river basins; concentrations of fecal contaminants in river basins; and concentrations of heavy metals in river basins. We find no evidence that environmental quality deteriorates steadily with economic growth. Rather, for most indicators, economic growth brings an initial phase of deterioration followed by a subsequent phase of improvement. The turning points for the different pollutants vary, but in most cases they come before a country reaches a per capita income of $8,000

This paper describes and tries to reconcile trends in alternative work arrangements in the United States using data from the Contingent Worker Survey supplements to the Current Population Survey (CPS) for 1995 to 2017, the 2015 RAND-Princeton Contingent Work Survey (CWS), and administrative tax data from the Internal Revenue Service for 2000 to 2016. We conclude that there likely has been a modest upward trend in the share of the U.S. workforce in alternative work arrangements during the 2000s based on the cyclically-adjusted comparisons of the CPS CWS's, measures using self-respondents in the CPS CWS, and measures of self-employment and 1099 workers from administrative tax data. We also present evidence from Amazon Mechanical Turk that suggests that the basic monthly CPS question on multiple job holding misses many instances of multiple job holding.

This paper studies the test-retest reliability of a standard self-reported life satisfaction measure and of affect measures collected from a diary method. The sample consists of 229 women who were interviewed on Thursdays, two weeks apart, in Spring 2005. The correlation of net affect (i.e., duration-weighted positive feelings less negative feelings) measured two weeks apart is 0.64, which is slightly higher than the correlation of life satisfaction (r=0.59). Correlations between income, net affect and life satisfaction are presented, and adjusted for attenuation bias due to measurement error. Life satisfaction is found to correlate much more strongly with income than does net affect. Components of affect that are more person-specific are found to have a higher test-retest reliability than components of affect that are more specific to the particular situation. While reliability figures for subjective well-being measures are lower than those typically found for education, income and many other microeconomic variables, they are probably sufficiently high to support much of the research that is currently being undertaken on subjective well-being, particularly in studies where group means are compared (e.g., across activities or demographic groups).

What effect does a severe disability have on individuals' employment and earnings? Has the computer revolution lessened the adverse labor market consequences of severe disabilities? This paper investigates the labor market effects of severe, traumatic disabilities resulting from spinal cord injuries (SCIs). We compare the employment experiences of a sample of individuals with SCIs to those of former co-workers over the same period, and to two random samples of individuals in New Jersey. The analysis is based in large part on a 1994 telephone survey of New Jersey adults who had SCIs within the past ten years. Results indicate that the occurrence of an SCI causes a steep decline in employment, hours worked, and weekly earnings, but relatively little change in wage rates for those who work. The computer revolution has the potential to expand employment opportunities for people with disabilities. Our results indicate that having computer skills is associated with higher earnings, and a faster return to work and earnings recovery, for SCI individuals, after holding constant other variables such as education. There is no apparent earnings gap between SCI and non-SCI computer users, whereas among those who do not use computers at work the earnings of SCI employees lag behind those of non-SCI employees. Despite the benefits, individuals with SCIs are less likely to use computers than the general population

Instrumental Variables (IV) estimates tend to be biased in the same direction as Ordinary Least Squares (OLS) in finite samples if the instruments are weak. To address this problem we propose a new IV estimator which we call Split Sample Instrumental Variables (SSIV). SSIV works as follows: we randomly split the sample in half, and use one half of the sample to estimate parameters of the first-stage equation. We then use these estimated first-stage parameters to construct fitted values and second-stage parameter estimates using data from the other half sample. SSIV is biased toward zero, rather than toward the plim of the OLS estimate. However, an unbiased estimate of the attenuation bias of SSIV can be calculated. We us this estimate of the attenutation bias to derive an estimator that is asymptotically unbiased as the number of instruments tends to infinity, holding the number of observations per instrument fixed. We label this new estimator Unbiased Split Sample Instrumental Variables (USSIV). We apply SSIV and USSIV to the data used by Angrist and Krueger (1991) to estimate the payoff to education

In this report we discuss the expected effects of reforms in education and labor market policies already implemented or suggested by the current liberalconservative government in Sweden. According to our guidelines, the main focus is on whether the reforms are suited for the purpose of increasing employment, hours worked and productivity.

This paper reports on a household survey specially designed to measure what we call the "offshorability" of jobs, defined as the ability to perform the work duties from abroad. We develop multiple measures of offshorability, using both self-reporting and professional coders. All the measures find that roughly 25% of U.S. jobs are offshorable. Our three preferred measures agree between 70% and 80% of the time. Furthermore, professional coders appear to provide the most accurate assessments, which is good news because the Census Bureau could collect data on offshorability without adding a single question to the CPS. Empirically, more educated workers appear to hold somewhat more offshorable jobs, and offshorability does not have systematic effects on either wages or the probability of layoff. Perhaps most surprisingly, routine work is no more offshorable than other work.

This paper tries to reconcile evidence on the effect of schooling on income and on GDP growth from the microeconometric and empirical macro growth literatures. Much microeconometric evidence suggests that education is an important causal determinant of income for individuals within countries as diverse as Sweden and the United States. At a national level, however, recent studies have found that increases in educational attainment are unrelated to economic growth. This finding is shown to be a spurious result of the extremely high rate of measurement error in first-differenced cross-country education data. After accounting for measurement error, the effect of changes in educational attainment on income growth in cross-country data is at least as great as microeconometric estimates of the rate of return to years of schooling. We also investigate another finding of the macro growth literature -- that economic growth depends positively on the initial stock of human capital. We find that the effect of the initial level of education on growth is sensitive to the econometric assumptions that are imposed on the data (e.g., constant-coefficient assumption), as well as to the other covariates included in the model. Perhaps most importantly, we find that the initial level of education does not appear to have a significant effect on economic growth among OECD countries. The conclusion comments on policy implications for Sweden based on the human capital literature

This paper presents estimates of the average cost of the workers' compensation insurance program for a homogeneous group of employers by state. These estimates are of interest because they reflect the operation, direct nominal costs, and efficiency of workers' compensation. The paper estimates cost equations for a variety of alternative specifications. The main finding is that when cost equations are estimated by ordinary least squares there is a unit elasticity of costs with respect to benefits, but instrumental variable estimates of the effect of benefits yield a greater than unit elasticity. The results also indicate that the presence of a state insurance fund is associated with higher average costs to employers, all else equal. Finally, we explore the impact that the minimum standards recommended by the National Commission on State Workmen's Compensation Laws would have on workers' compensation costs.