Key Points on Midterm 1

Key Points on Midterm 1 - Key Points on Midterm 1 1....

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Key Points on Midterm 1 1. Juhn/Potter article about the future of labor force participation Ans: the article concludes that the rise of the labor force participation rate that we have seen since WWII has most likely come to an end. They don’t expect female labor force participation to rise any further than the high levels in the 90s unless targeted policies (subsidized child care, EITC) push more women in the labor force. The article also cannot predict much of a reversal in the trends of LFPR of men. While it is possible that stricter eligibility rules for disability claims will keep some men in the labor force and while some stricter social security rules might induce some men to stay in the LF longer. Juhn/potter do not think that this will translate into much growth in the LFPR. 2. How Card/Krueger used high-wage and low-wage fast food employers in NJ to estimate the effect of the minimum wage on employment? Ans: CK use a Difference-in-difference approach in which they used the increase in NJ’s minimum wage to estimate the effect of a rise in the minimum wage on employment in the fast food industry. They use the low-wage employers in NJ as the treatment group since they are directly affected by the change in the mw (they
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Key Points on Midterm 1 - Key Points on Midterm 1 1....

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