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Princeton University Professor of Economics and Public Affairs Alan Krueger during the Federal Reserve Bank of Kansas City's annual Jackson Hole Economic Policy Symposium in Jackson Hole, Wyoming August 28, 2015. REUTERS/Jonathan Crosby - GF10000185435
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Highlights: Alan Krueger’s impact on economics and public policy

“The artist is gone but his art remains.” – Susan Dynarski, Professor of Public Policy, Education, and Economics, University of Michigan

Alan Krueger, a prominent Princeton University economist who died at age 58 in March 2019, made a lasting mark on economic research on topics ranging from labor markets to education and from terrorism to rock music. The Hutchins Center on Fiscal and Monetary Policy at the Brooking Institution and the Economic Policy Institute brought together leading scholars and others on June 26 to celebrate Krueger’s scholarly work and his impact on economic policy. Here are some highlights of the event.

Ben Bernanke’s welcome

Ben Bernanke, former chair of the Federal Reserve and now a Brookings distinguished fellow, opened the event with a remembrance of Alan Krueger and his highly influential work, noting that he “stretched the boundaries of what his field was normally about.” https://youtu.be/kK-fKm6tx5g

Revolutionary work in evidence-based economics

Alan Krueger is remembered for his holistic approach to research, examining variables beyond traditional data inputs like wages. Krueger’s work consistently took unconventional factors into consideration, such as perceived well-being, or happiness. Several participants, including Harvard professor Lawrence Katz and University of Maryland professor Katharine Abraham, director of the Maryland Center for Economics and Policy, remembered his commitment to listening to people, rather than just collecting quantitative variables, and how this commitment to credible, thorough research painted a more complete picture of every topic he studied. All panelists were quick to credit Krueger as one of the pioneers of “the credibility revolution,” the movement among economists to make research as comprehensive and replicable as possible, while addressing and eliminating fallacies in the research. Moreover, Krueger used this research boldly. Lawrence Mishel, distinguished fellow at the Economic Policy Institute, recounted an instance when Krueger proclaimed labor’s lack of bargaining power in negotiations to a conference of central bankers—a group Mishel said are rarely considered pro-worker. Krueger exemplified the notion of boldly bringing truth to light through credible, replicable research.

Author

One topic Krueger researched exhaustively was the minimum wage. Harvard’s Katz described an instance when Krueger and his team called every fast food restaurant in Texas with a survey. His commitment to exhaustive research centered around humans, rather than regressions, and this novel approach to research shook economists’ understanding of the labor market to the core. One staffer who worked with Alan Krueger in the Obama administration noted, “without that research, we would not have $15 an hour minimum wage.” Denis McDonough, former White House chief of staff under President Barack Obama and now a senior principal at the Markle Foundation, noted that Krueger coined the term “Great Gatsby Curve, which helped “refine and popularize the idea that higher levels of inequality are associated with lower intergenerational mobility.” This comprehensive research led to over a hundred changes in state minimum wage laws in the years following, when previously there had previously only been a couple.

Commitment to economics in public policy

McDonough made a point of emphasizing Alan Krueger’s commitment to interweaving public policy and economics. “First and consequentially,” McDonough said, “Alan saw a role for economics in public policy … in his case it was not in addition to his research but an extension of it.” McDonough described several other aspects of Krueger’s work, including his work ethic while in the White House, saying his economic forecasts often “scared” the president more than the national security briefings. McDonough, like the previous panelists, highlighted Krueger’s commitment to empirically based research, saying: “Alan approached his work not with opinions or intuitions … but by turning to empirical evidence.” https://youtu.be/ytpjQOpItyc https://youtu.be/YJnz8aPNuAI Continuing to highlight Krueger’s impact on others, McDonough noted that he influenced policy through the students he trained. He challenged students to be as rigorous and fact-based as possible in their own research. His students now influence a wide variety of policy today. McDonough also acknowledged the challenges to conventional norms that Krueger left behind. “His innovative work on terrorism, in what makes a terrorist, showed that support for violent terrorist attacks among populations in Israel, Lebanon, Gaza and the West Bank did not decrease with higher levels of education or earnings, challenging a fairly fundamental tenant of U.S. counterterrorism thinking,” McDonough explained. “It’s exactly these kinds of uncomfortable analyses that Alan used to … challenge policy for years.” “Alan used economics to support emotion and used emotion to support economics,” McDonough concluded. At a pivotal moment of Obama’s presidency, at a time when the American people were disgusted with politics, Alan Krueger used his knowledge of economics to inform the president that a child born into poverty today has about a 33% chance to escape, compared with a better than 50/50 chance in the immediate post-World War II era.

Impact at Princeton

At Princeton University, Alan Krueger was, in addition to his teaching, the founding director of the Princeton University Survey Research Center. Krueger founded the center to enable researchers to ask questions that otherwise would not have answers. Common statistics about the labor force can be traced to Alan’s discoveries. Katharine Abraham noted that, thanks to his work, economists now have evidence about how search intensity changes for unemployed people with the duration of their unemployment, as well as how people are spending their time when they are not working. In 2008, under the umbrella of the Princeton Data Improvement Initiative, Krueger commissioned economists to write papers and attend a conference on approaches to improving measurement techniques. Krueger’s influence extended beyond his own work and had the ability to stimulate the research of his colleagues across the field. Alan Krueger’s work at Princeton had reach beyond the academy. McDonough highlighted his leading role in developing a tax credit to encourage job creation. While most government economists would have opted to apply existing economic literature to the design question, Krueger crafted a new field study, deployed it through the Princeton Survey Research Center, and presented the research to President Obama.

The economics of education

Cecilia Rouse, dean and professor of economics at Princeton University, pointed to Alan Krueger’s continued commitment to credible, insightful, and exhaustive research in education. Several of his novel research projects of twins’ educational attainment led directly to a breakthrough in understanding of how state mandatory schooling age laws shape future student earnings, prompting several states to raise their mandatory schooling age. Diane Schanzenbach, director and faculty fellow at the Institute for Policy Research at Northwestern University, elaborated on Kruger’s fearlessness in challenging conventional norms. Krueger first suggested that increased school funding was correlated with increased student wages, an idea that Schanzenbach pointed out was considered “heresy” at the time. Krueger unearthed the fact that children randomly placed in smaller classes outperformed peers assigned to larger classrooms. Kruger’s bold challenges to public norms have since shaped education policy, and had it not been for Krueger’s fearless research, our conceptions of education would be far narrower.

“Rockonomics”

Alan Krueger’s work was not limited to employment, education, and wage equality. He researched the economics of the music industry extensively and was writing a book highlighting these discoveries, titled, Rockonomics: A Backstage Tour of What the Music Industry Can Teach Us About Economics and Life (Penguin Random House), published a few months after his death. Steve Liesman, senior economics reporter at CNBC, discussed Krueger’s contributions and passion for music, noting: “You’d call to talk to Alan about the opioid crisis and it would end up in a conversation about Rockonomics.” Krueger analyzed the staggering inflation in the concert business, the impact of music streaming on artist profits, and how the forces of technological change and inequality continue to change the way we understand these concepts. https://youtu.be/bng4nYccKrI Liesman related that Krueger’s primary goal with this book was to use “music as a vehicle to explain economic principles [as] a way to make them more accessible to average Americans.” Stephanie Aaronson, vice president and director of the Economic Studies program at Brookings, concluded by reiterating the significant contributions Alan Krueger made through “the quality, the originality, the breadth and the importance” of his work. As Lawrence Katz said, “Alan not only made economics more scientific … but also more humanistic, by actually trying to figure out what people think and feel.” For a full transcript and videos of the entire proceedings, visit the event’s web page. Sonia Gupta and John Holland made significant contributions to this post.

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