Best Selling Books by Alan B. Krueger

Why we need to think more like economists to successfully combat terrorism If we are to correctly assess the root causes of terrorism and successfully address the threat, we must think more like economists do. Alan Krueger’s What Makes a Terrorist, explains why our tactics in the fight against terrorism must be based on more than anecdote, intuition, and speculation. Many popular ideas about terrorists are fueled by falsehoods, misinformation, and fearmongering. Many believe that poverty and lack of education breed terrorism, despite a wealth of evidence showing that most terrorists come from middle-class and often college-educated backgrounds. Krueger closely examines the factors that motivate individuals to participate in terrorism, drawing inferences from terrorists’ own backgrounds and the economic, social, religious, and political environments in the societies from which they come. He describes which countries are the most likely breeding grounds for terrorists, and which ones are most likely to be their targets. Krueger addresses the economic and psychological consequences of terrorism and puts the threat squarely into perspective, revealing how our nation’s sizable economy is diverse and resilient enough to withstand the comparatively limited effects of most terrorist strikes. He also calls on the media to be more responsible in reporting on terrorism. Bringing needed clarity to one of the greatest challenges of our generation, this 10th anniversary edition of What Makes a Terrorist features a new introduction by the author that discusses the lessons learned in the past decade from the rise of ISIS and events like the 2016 Pulse nightclub attack in Orlando, Florida.

A summary of economic research on education conducted by Krueger in the 1990s. The papers are divided into four major sections: estimating the payoff of completing more education; estimating the payoff of school quality; issues related to race and education; and changes in educational payoff over time, including technological change. A final two essays consider education and economic growth, with a focus on Sweden, and evaluate whether American schools are "broken." Krueger (economics and public affairs, Princeton U.) is also author of Education matters and served as the chief economist of the U.S. Labor Department of in 1994 and 1995. Annotation copyrighted by Book News Inc., Portland, OR

Two leading economists debate the effectiveness ofhuman capital policies in addressing widening U.S inequality.

A powerful new challenge to the conventional view that higher minimum wages reduce jobs for low-wage workers. Using data from recent minimum wage change results, economists David Card and Alan Krueger show that increases in the minimum wage lead to increases in pay, but no loss in jobs.

Alan Krueger, a former chairman of the president''s Council of Economic Advisers, uses the music industry, from superstar artists to music executives, from managers to promoters, as a way in to explain key principles of economics, and the forces shaping our economic lives. The music industry is a leading indicator of today''s economy; it is among the first to be disrupted by the latest wave of technology, and examining the ins and outs of how musicians create and sell new songs and plan concert tours offers valuable lessons for what is in store for businesses and employees in other industries that are struggling to adapt. Drawing on interviews with leading band members, music executives, managers, promoters, and using the latest data on revenues, royalties, streaming tour dates, and merchandise sales, Rockonomics takes readers backstage to show how the music industry really works--who makes money and how much, and how the economics of the music industry has undergone a radical transformation during recent decades. Before digitalization and the ability to stream music over the Internet, rock stars made much of their income from record sales. Today, income from selling songs has plummeted, even for superstars like James Taylor and Taylor Swift. The real money nowadays is derived from concert sales. In 2017, for example, Billy Joel earned $27.4 million from his live performances, and less than $2 million from record sales and streaming. Even Paul McCartney, who has written and recorded more number one songs than anyone in music history, today, earns 80 percent of his income from live concerts. Krueger tackles commonly asked questions: How does a song become popular? And how does a new artist break out in today''s winner-take-all economy? How can musicians and everyday workers earn a living in the digital economy?

David Card and Alan B. Krueger received the IZA Prize in Labor Economics in 2006 for their outstanding contributions to the field. This volume provides an overview of their most important work on school quality, differences in wages across groups in the US, and the effect of changes in the minimum wage on employment and wage setting.

A large central government providing numerous public services has long been a hallmark of Swedish society, which is also well-known for its pursuit of equality. Yet in the 1990s, Sweden moved away from this tradition in education, introducing market-oriented reforms that decentralized authority over public schools and encouraged competition between private and public schools. Many wondered if this approach would improve educational quality, or if it might expand inequality that Sweden has fought so hard to hold down. In The Market Comes to Education in Sweden, economists Anders Björklund, Melissa Clark, Per-Anders Edin, Peter Fredriksson, and Alan Krueger measure the impact of Sweden''s bold experiment in governing and help answer the questions that societies across the globe have been debating as they try to improve their children''s education. The Market Comes to Education in Sweden injects some much-needed objectivity into the heavily politicized debate about the effectiveness of educational reform. While advocates for reform herald the effectiveness of competition in improving outcomes, others suggest that the reforms will grossly increase educational inequality for young people. The authors find that increased competition did help improve students'' math and language skills, but only slightly, and with no effect on the performance of foreign-born students and those with low-educated parents. They also find some signs of increasing school segregation and wider inequality in student performance, but nothing near the doomsday scenarios many feared. In fact, the authors note that the relationship between family background and school performance has hardly budged since before the reforms were enacted. The authors conclude by providing valuable recommendations for school reform, such as strengthening school evaluation criteria, which are essential for parents, students, and governments to make competent decisions regarding education. Whether or not the market-oriented reforms to Sweden''s educational system succeed will have far reaching implications for other countries considering the same course of action. The Market Comes to Education in Sweden offers firm empirical answers to the questions raised by school reform and brings crucial facts to the debate over the future of schooling in countries across the world.

This paper uses a new survey to contrast the wages of genetically identical twins with different schooling levels. Multiple measurements of schooling levels were also collected to assess the effect of reporting error on the estimated economic returns to schooling. The data indicate that omitted ability variables do not bias the estimated return to schooling upward, but that measurement error does bias it downward. Adjustment for measurement error indicates that an additional year of schooling increases wages by 16%, a higher estimate of the economic returns to schooling than has been previously found.

The positive social benefits of low unemployment are many—it helps to reduce poverty and crime and fosters more stable families and communities. Yet conventional wisdom—born of the stagflation of the 1970s—holds that sustained low unemployment rates run the risk of triggering inflation. The last five years of the 1990s—in which unemployment plummeted and inflation remained low—called this conventional wisdom into question. The Roaring Nineties provides a thorough review of the exceptional economic performance of the late 1990s and asks whether it was due to a lucky combination of economic circumstances or whether the new economy has somehow wrought a lasting change in the inflation-safe rate of unemployment. Led by distinguished economists Alan Krueger and Robert Solow, a roster of twenty-six respected economic experts analyzes the micro- and macroeconomic factors that led to the unexpected coupling of low unemployment and low inflation. The more macroeconomically oriented chapters clearly point to a reduction in the inflation-safe rate of unemployment. Laurence Ball and Robert Moffitt see the slow adjustment of workers'' wage aspirations in the wake of rising productivity as a key factor in keeping inflation at bay. And Alan Blinder and Janet Yellen credit sound monetary policy by the Federal Reserve Board with making the best of fortunate circumstances, such as lower energy costs, a strong dollar, and a booming stock market. Other chapters in The Roaring Nineties examine how the interaction between macroeconomic and labor market conditions helped sustain high employment growth and low inflation. Giuseppe Bertola, Francine Blau, and Lawrence M. Kahn demonstrate how greater flexibility in the U.S. labor market generated more jobs in this country than in Europe, but at the expense of greater earnings inequality. David Ellwood examines the burgeoning shortage of skilled workers, and suggests policies—such as tax credits for businesses that provide on-the-job-training—to address the problem. And James Hines, Hilary Hoynes, and Alan Krueger elaborate the benefits of sustained low unemployment, including budget surpluses that can finance public infrastructure and social welfare benefits—a perspective often lost in the concern over higher inflation rates. While none of these analyses promise that the good times of the 1990s will last forever, The Roaring Nineties provides a unique analysis of recent economic history, demonstrating how the nation capitalized on a lucky confluence of economic factors, helping to create the longest peacetime boom in American history. Copublished with The Century Foundation

This paper presents an overview and interpretation of the literature relating school quality to students'' subsequent labor market success. We begin with a simple theoretical model that describes the determination of schooling and earnings with varying school quality. A key insight of the model is that changes in school quality may affect the characteristics of individuals who choose each level of schooling, imparting a potential selection bias to comparisons of earnings conditional on education. We then summarize the literature that relates school resources to students'' earnings and educational attainment. A variety of evidence suggests that students who were educated in schools with more resources tend to earn more and have higher schooling. We also discuss two important issues in the literature: the tradeoffs involved in using school-level versus more aggregated (district or state-level) quality measures; and the evidence on school quality effects for African Americans educated in the segregated school systems of the South.

This paper reviews the theoretical arguments for and against linking international labor standards to trade. Based on theory alone it is difficult to generalize about the effect of labor standards on efficiency and equity. Some economists have argued that international labor standards are merely disguised protectionism. An evaluation of determinants of support for legislation that would ban imports to the United States of goods made with child labor provides little support for the prevailing political economy view. In particular, members of Congress representing districts with relatively many unskilled workers, who are most likely to compete with child labor, are less likely to support a ban on imports made with child labor. Another finding is that the prevalence of child labor declines sharply with national income. Last, an analysis of compulsory schooling laws, which are often suggested as an alternative to prohibiting child labor, finds a tremendous amount of noncompliance in developing nations.

This paper presents evidence on the quality of schooling by race and ethnic origin in the United States. Although substantial racial segregation across schools exists, the average pupil-teacher ratio is approximately the same for black and white students. Hispanic students, however, on average have 10 percent more students per teacher. Relative to whites, blacks and Hispanics are less likely to use computers at school and at work. The implications of these differences in school quality for labor market outcomes are examined. We conclude by examining reasons for the increase in the black-white earnings gap since the mid-1970s.

The most widely used measure of employer health care costs, the health insurance component of the Employment Cost Index, indicates that cost growth has decelerated since 1989. In recent years employer expenditures per hour worked have even declined in nominal dollars. This paper analyzes the components of changes in employers'' health care costs over the 1992-94 and 1987-93 periods. We find that employer costs have decreased primarily as a result of a steady decrease in the fraction of workers with coverage and a large decrease in the rate of growth of insurance premiums. We conclude that the shift to managed care does not appear to be directly responsible for significant cost savings because managed care premiums are almost as high as those for fee-for-service plans, on average. Finally, we note that there is a significant need for improved data collection in this area.

Between 1996 and 1998 California and Texas eliminated the use of affirmative action in college and university admissions. At the states'' elite public universities admission rates of black and Hispanic students fell by 30-50 percent and minority representation in the entering freshman classes declined. In this paper we ask whether the elimination of affirmative action caused any change in the college application behavior of minority students in the two states. A particular concern is that highly qualified minorities - who were not directly affected by the policy change - would be dissuaded from applying to elite public schools, either because of the decline in campus diversity or because of uncertainty about their admission prospects. We use information from SAT-takers in the two states to compare the fractions of minority students who sent their test scores to selective state institutions before and after the elimination of affirmative action. We find no change in the SAT-sending behavior of highly qualified black or Hispanic students in either state.

This study provides the first nation-wide analysis of the labor market implications of occupational licensing for the U.S. labor market, using data from a specially designed Gallup survey. We find that in 2006, 29 percent of the workforce was required to hold an occupational license from a government agency, which is a higher percentage than that found in studies that rely on state-level occupational licensing data. Workers who have higher levels of education are more likely to work in jobs that require a license. Union workers and government employees are more likely to have a license requirement than are nonunion or private sector employees. Our multivariate estimates suggest that licensing has about the same quantitative impact on wages as do unions -- that is about 15 percent, but unlike unions which reduce variance in wages, licensing does not significantly reduce wage dispersion for individuals in licensed jobs.

Workers'' compensation insurance provides cash payments and medical benefits to workers who incur a work-related injury or illness. Many features of the workers'' compensation program parallel features of proposed mandated employer-paid health insurance plans. This paper empirically examines the incidence of the workers'' compensation program to infer the likely consequences of mandated health insurance proposals. In certain industries, such as trucking and carpentry, workers'' compensation insurance costs are quite large, and vary tremendously within states over time, and across states at a moment in time. This variation is used to identify the incidence of the program. Empirical analysis of two data sets suggest that changes in employers'' costs of workers'' compensation insurance are largely shifted to employees in the form of lower wages. In addition, higher insurance costs are found to have a negative but statistically insignificant effect on employment. The implied elasticity of labor demand from our results is about -.50.