Surveillance: Alan Krueger's Economic Legacy

has died. The course was suicide. He was fifty eight. Alan, who had been a professor at Princeton seven, served in Obama's White House from after a stint as the Treasury Department's Assistant Secretary for Economic Policy. In addition, he served as chief economist at the Labor Department for a year during President Bill Clinton's administer ration. Our listeners will remember him joining us on nearly every first Friday of the

month to discuss the payrolls report. He made us all smarter every time he spoke, and put in great effort to help us all care about the people behind the data in a way not enough people do. He cared a loyal public servant and a world renowned labor market expert. I want to bring in on the phone now Danny

Blanche flat Denmouth Professor of Economics. And here in the studio Michael Mckeeblinberg International Economics and Policy correspondent, Mike Sad Sad day Um, and we get the opportunity now, and we should take the opportunity to reflect on his legacy. We were all shocked, and his legacy is a great one. And uh when all he wishes that he had been able to read the tributes to him over the last twenty four hours um before he died. Because he was,

as you say, extraordinarily well respected. The amount of the number of contributions he made in the labor anomics area tremendous. Starting with his work on the minimum wage. He and David card theorized that maybe what the books were telling us was wrong and that minimum wages don't decrease unemployment. New Jersey raised the minimum wage. They went to the border. They looked at cities on the Pennsylvania side and the New Jersey side and found that there was no real impact.

The findings remained controversial, and uh, there are caveats, but basically he changed the whole conversation. And now we have cities and states across the country raising the minimum wage. Probably would not have happened without Alan Krueger's work. Yeah, Danny Blanche Flower, come on in here, because one thing Jonathan said, that's very true. Uh, he cared. Alan Kruger cared. And can you give us a sense of some of the research that he did. Uh, that really made a

huge difference from your perspective. Right, And a great friend of mine. I've known since the beginning with the end of the nineties when he first went to Princeton. So and I remember, actually he has book on the Mister Measurement. Actually we bought him a hat David Carden and Alan hats and I have long memories of Alan. I mean a titan of the field. I mean a great empiricist. If people go and look at Google Schollar, here's ninety

thousand sights that's unbelievable. And work across the whole range of fields. So the Mister Measurement work is courses was crucial. But there's lots of other things. There's work on education, there's early work on growth, um, there's work on inequality, on computers, on uber on terrorism, on long term unemployment, on opioids, all all all work related, two problems out there that Alan saw about trying to look at problems in the world, trying to do something about them and

trying to fix them. And obviously we should also talk about the policy work that he did um as chief eclumnist at the Labor Department with Robert Reich and Bill Clinton, who wrote a beautiful comment yesterday for him, his time as Assistant Secretary of the Treasury with Geitner, and then again his time for Obama as a as the Chief Economic Advisor, and again Obama wrote a beautiful thing yesterday. So this is a sad, sad loss for our field, a sad loss to me of a friend, Danny. Let's

talk about the late eighties. Michael talked about Allen's contribution to the minimum wage debate. It was the late eighties and overwhelmingly there was this massive consensus that for low wage workers, if you establish a minimum wage, you'll put up that minimum wage. It would damage employment. Just walk me through how much Annan Krueger did to just change the way we think about something that we take for granted now, right, I mean, I was I remember it

very well. The early I've been working on wages, and I remember David Carl and Allen working on this project. I went to the original conference about the book in I think or I think it was, And basically the thing that they did was it was past breaking in two senses. It was past breaking because the result you've talked about, and it was past breaking because they conducted experiments which actually have taken over an economic which in the in the eighties and early nineties was just dominated

by theory. So Allen and David, particularly now and later pushed this thing where you go and look at the world. And what they looked at was this experiment. And then they sitting in Princeton, They're interested in what goes on to at the minimum wage, and they and they looked at an experiment of fast foodhouses um along the border between New Jersey and Pennsylvania, and you saw a rise in the right in the minimum wage in I think

it was a New Jersey if I recall. And what they did was they actually looked and went measured what happened. And what they found was one of the big things they found is as the minimum wage was right was increased. What you saw was that people actually ended up and they hired better people, but people day longer. So actually what it turned out was employment fact in some of the results, you actually see a rising employment. Arise in the minimum wage from a very low level generated the

result that employment actually rose. And this was hugely controversial. You can look back at the literature and the comments made by all kinds of people about the work that they did, and this generated a huge debate. And I think the answer the big deal was arise in the minimum wage when it was so low actually had positive

employment effects. So that was hugely controversial. But methodologically, really they introduced this thing when you go and look at the world, you see what happens there and you report it. And that's why the book was so important. And then Alan followed all kinds of stuff like that later I'm conducted surveys and so on, and did so when he

worked for President Obama. Um so I mean, I mean, as I said, I think the right word I would say is a true tightener, and the other thing I actually sound and perhaps go back to what Mike was saying, I think the question Alan was an absolute shoe it to win the Nobel Prize there's no doubt of that. Probably the greatest, the greatest incuraicist we've seen of our age.

We really have lost someone who was really important. The the idea that he looked at data and gathered data that wasn't available and based his conclusions on data very important because a lot of people look at his career, they look at the minimum wage, they look at his employment in two Democratic administrations, and they say he had to be a liberal Democrat, But he was really uh an economist looking at problems. As Danny said, one of the most interesting things he did was look at the

effect of licensing unemployment. You have to be licensed to be a hairdresser, you have to be licensed in states to braid hair, things like that, and the impact that had on holding down employment. And that is a conservative cause and a lot of people on the Republican side have cited that as important work. So it wasn't that he was taking a liberal or conservative viewpoint. He was

taking an economist foot point. And he really also highlighted the opioid epidemic as a problem for the labor force, showing detailing how nearly half of men fifty four and not in the labor force took pain medication every day. This was revolutionary, Danny, and definitely changed the conversation in the United States about this about this epidemic. Absolutely, I had a big influence on me. I talked to Alan about the work that he'd done. I actually went off

afterwards that wrote the paper myself about pain. I mean, Alan's work was really important. Let's let's broaden it, um. The work on pain was really important. To work on people leaving the labor force was really important. So this was about I mean, I absolutely agree with everything Might just said. I think you would also say his work was about trying to improve the human condition. I mean, think about this work about opiod. Mike's completely right, this

is not political. I'm I always think that what Alan did was he snapped at the heels of complacency, try to look at things and said is that right? So he went and worked on Uber. But there's a great paper he works on trying to look at what happened at Firestone, looking at the looking at the evidence and the factory and says, why did those Firestone tires fail?

Turned out they failed because the quality of workers who actually made him in a two week period was actually the really important thing that Alan went and looked at the data and thought about it as as Mike said, not political in that sense, trying to think about improving the human condition and understanding how how the economy works. And I think that's that's crucial and central to his contribution. I mean, work on inequality. What what what? What? Why

is the inequality rising? What's the cause of it? He talked about computers and the use of computers impacting people's wage rates. That's not political, It's about trying to understand how the world works. Danny is great to catch how but you Danny Blanche flat down with professor of Economics and a special thanks to Michael mcke Blomberg International Economics

and Policy correspondent. We should say that if you are having thoughts of suicide, please do call the National Suicide Prevention Life Flotline at seven three eight to five, or go to Speaking of Suicide dot com, forward slash resources. Princeton University economist Alan Krueger has died. His contribution to the field of economics cannot be overstated. He will be missed by all that knew him, including all of us here at Bloomberg. Over the weekend, America lost a brilliant

economist and many of us lost a dear friend. This according to former President Barack Obama. He was talking about Alan Krueger at the Princeton professor and advisor to UH former Presidents Obama and Clinton. UH President Obama saying he saw economic policy not as a matter of abstract theories, but as a way to make people's lives better. He died over the weekend at age fifty eight. The cause

was suicide. UH. We want to remember Alan Krueger for so many things, for his contributions to the field of economics, but also to his personality which graced this show, graced many shows on Bloomberg and throughout the media and economics profession influenced politics, crossed both aisles of the political spectrum

and joining us to do so. Bessie Stevenson, Bloomberg Opinion columnist, former U S Department of Labor Chief economist, currently Associate Professor of Public Policy at the University of Michigan's Ford School, joining us by phone. Peter Koy also joining us Bloomberg Business Week, Head of Economics. Here in our Bloomberg eleven three Oh Studios, Betsy, I want to start with you. I I know you know you knew Alan Krueger personally. Can you give me a sense of what his biggest contribution,

in your mind was to the economics profession. Oh, that's a really a hard place to start. I think, Um, Alan's biggest contribution to the profession was his insatiable curiosity, and that insatiable curiosity led him to UM investigate so many things that have gone on to be incredibly important.

Lots of people cite his minimum wage work UM, which really, through careful empirical analysis, shows that the kind of negative employment effects that we are our models taught us might happen with a minimum wage didn't seem to be as bad in practice. UM. And that again came out of

his real curiosity. He had a knack for trying to identify, um, what economists call natural experiments, trying to look around the world and see, is there something that can help me get at the root causal effect of some kind of policy? And so with that, you know, he's pioneered a real

empirical revolution. And uh, and so I think if you ask somebody the profession was his biggest contribution, it was um what some people call the credibility revolution, bringing empirical analysis to economics in order to be able to objectively look at questions and find the answer regardless of your preconceived notions, based on scientific analysis. Peter, boy, you were the chief economist of the Labor Department, which was a job he had had before. What what did he tell

you before you took that post? Um? You know he uh uh. For me, it was a really um tough decision whether I should take that post because I was actually still an assistant professor. I was a ten year yet um, and you know, Alan had the view that it was a really hard job, but it was incredibly fulfilling and that what we were doing and our profession was trying to make people's lives better and getting some

experience on the ground. Um. You know, actually working with a policy um that we were um studying and debating would make me a better economist than he was, right, Peter, you know, it's interesting to me. I'm thinking of some of the more recent contributions, uh that Professor Krueger made having to do with the opioid epidemic, where he changed the conversation very much about what the impact was. Can you give us a sense of how much he did

change that conversation. You know, as Bessie Stevenson said, he was all about getting the data and looking at it in fresh ways, and people have had a sense that opioids were an issue, but it wasn't until he gathered the data that people grasped how big the issue was. I think he found that if you looked at um working age males who were not in the labor force, close to half of them were taking pain killers of

one kind or another. And that, you know, could have been as hard to disentangle the cause and effect, whether it was because they were in pain that they were out of labor force, or whether it was taken to pain killers that made the mindfit for the labor force. But one way or another, it was crucial information that has really, I think made people even more sensitive to the depths of the opioid crisis and is as many

other things he's done, led to policy changes. So definitely, Alan Krueger made a lot of contributions on the economics side. On a personal level, he was just a wonderful guy and Betsy Stevenson, you you spent a lot of time with him. I mean, can you give us a sense of what it was like to work with him. UM. So you know, Alan was really a wonderful guy. Is the right way to say. He's extremely generous, UM and in kind and easy going, and those were not Um

qualities they too often found an economists. He was. He was someone who really was enthusiastic about all his foreignings and was excited to share them with people who wanted

to listen. UM. And you know, Katherine Rampell has a really lovely column about being his research assistant and the Washington Post and how he you know, took her, you know, the suggestions of a nineteen year old about how he couldn't prove his writing, which she now cringes to think about UM with you know, joy and happiness that you know, that was his approach. He was a person who was really easy to talk to. UM. And and I think

mentored just an enormous amount of people. And I think you see that by that outpouring of tributes and grief UM on social media, because he really did take the time to mentor young faculty and young undergrads and people who were interested in economics. UM. And you saw that on your show. He would take the time to come and and chat with you guys about economics, because that is is who he was with, someone who was always excited to be around people and help, you know, advance

the study and knowledge of economics. And when he would come into the radio studio or the television said, he would stay after the segment was over. He would come early, and he would talk about tennis, and he would talk about vacation plans. So it was not just, you know, a sort of hit and run. Peter Koy, I am curious. There is this feeling that economics is sort of its own language and then it speaks of different curves and ratios. And Alan Krueger really touched on pop culture in many ways.

At one point even looking at concert tickets how they had surged him price. It started to generate more revenues for performers than CD sales. Can you talk a little bit about the sort of importance of the tangible aspects

of some of his research. He incorporated the economics of rock and roll into his freshman econ course at Princeton, which was hugely popular, and it's because it was a window into supplying demand, changing nature of labor markets that you can really learn from and that was a book. He's a book out this year called rock an Omics, and he's um, I hope it sells really well because in some ways it'll be his last gift to us. It's incredibly sad. Yes, thank you both for being with us.

Betsy Stevenson, Bloomer opinion columnist, former U S Department of Labor Chief economist as well as an associate professor at the University of Michigan's Forward School. Peter Koy, Bloomberg economics editor for the Business Week magazine, joining us here in the Bloomberg Interactive Broker Studios. We are remembering Alan Krueger, Princeton professor, advisor to UH former Presidents Barack Obama and Bill Clinton, longtime economics behemoth, someone who is expected to

win the Policer Prize UH and and and really in economics. UH, we lost a huge giant of the field. UH. He died. The cause was suicide. He was fifty eight years old. If you are having thoughts of suicide, please do call the National Suicide Prevention Lifeline at two seven three, eight to five five, or go to Speaking of Suicide dot com, Forward Slash resources get help, seek it out how the conversation. Uh, it is worth it. Thanks for listening to the Bloomberg

Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. I'm on Twitter at Tom Keene before the podcast. You can always catch us worldwide. I'm Bloomberg Radio